APEC nations scramble for free trade options in face of protectionism
Top world leaders gathered in Lima, Peru, Friday as part of the Asia Pacific Economic Cooperation Forum (APEC) to fight rising protectionism and continue free trade policies.
Following the United Kingdom’s vote to leave the EU in June and the United States electing Donald Trump as president earlier in November, there is concern at the APEC meeting over the threat to free trade. Peruvian President Pablo Kuczynski said global trade stopped growing in the last two years and would worsen if nations closed off their economies. “It is fundamental that world trade grow again and that protectionism be defeated,” said Kuczynski, a US-trained economist and former investment fund manager. “Anyone who wants to promote protectionism should read an economic history of the 1930’s.”
A delegate at ministerial meetings on Thursday and Friday said that APEC ministers were concerned over protectionism in the United States and that the mood was somber. US Trade Representative Michael Froman reassured leaders that US policy would not experience a dramatic change once Trump takes office in January. “Any new administration needs time to go through the transition process,” said Froman.
Free trade solutions
Trump, while not at the APEC summit, looms large over meetings in Peru. The US president-elect said he does not approve of the Trans-Pacific Partnership (TPP). But TPP is stuck in the US Congress, despite current US President Barack Obama’s approval. Obama’s administration has stopped trying to push through with the deal, which was signed by 12 countries in the Americas and the Asia-Pacific region, but not by China.
China has an alternate plan, promoting the Regional Comprehensive Economic Partnership (RCEP), which excludes the Americas as it currently stands. The Obama administration said China would be happy to take over as the global free-trade promoter. Mexico, Japan, Australia, Malaysia, New Zealand and Singapore plan to move forward with TPP with or without the US, according to Mexican Economy Minister Ildefonso Guajardo. “We determined that our countries will press ahead with this agreement independently of what Washington decides,” Guajardo told Mexican radio.
APEC finished a study for a regional free-trade area but will not discuss the study until the next annual APEC summit in Vietnam, said Peruvian Trade Minister Eduardo Ferreyros. TPP and RCEP were seen as potential paths toward an APC-wide agreement.
Obama, Russian President Vladimir Putin and Chinese President Xi Jinping are expected to arrive later during the conference. This will be Obama’s final international summit before leaving office in January.
APEC brought more than 1,000 representatives from 21 countries, which represent nearly 40 percent of the world’s population and 60 percent of the world’s economy. Several protesters, including indigenous people of the Amazon region, gathered Friday in Lima to protest free trade agreements.
kbd/kl (AP, AFP, Reuters)