China-backed trade deal center stage at summit as US retreats

The upcoming 33rd Association of Southeast Asian Nations (ASEAN) Summit will be held at the Suntec City convention and exhibition center in Singapore. (AFP)
Updated 11 November 2018
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China-backed trade deal center stage at summit as US retreats

  • China, Japan, India and other Asia-Pacific countries could announce a broad agreement on the Regional Comprehensive Economic Partnership (RCEP) at the summit
  • The US is not part of the deal, and is skipping the summit in Singapore

SINGAPORE: World leaders will push for the rapid completion of a massive, China-backed trade deal that excludes the US at a summit this week, in a rebuke to rising protectionism and Donald Trump’s “America First” agenda.
China, Japan, India and other Asia-Pacific countries could announce a broad agreement on the Regional Comprehensive Economic Partnership (RCEP), which covers half the world’s population, on the sidelines of the annual gathering.
Not only is the US absent from the deal, but Trump is skipping the summit in Singapore, highlighting how far he has pulled back from efforts to shape global trade rules and raising further questions about Washington’s commitment to Asia.
Trump launched his unilateralist trade policy with a bang shortly after coming to office by withdrawing from the Trans-Pacific Partnership, a deal spearheaded by predecessor Barack Obama that aimed to bind fast-growing Asian powers into an American-backed order to counter China.
His approach has left the floor open for Beijing to promote a rival pact it favors, the 16-member RCEP, a free trade deal which also aims to cut tariffs and integrate markets, but gives weaker protection in areas including employment and the environment.
The pact championed by Obama has been kept alive even without the US, and is due to go into force this year, but the Beijing-backed pact has now overtaken it as the world’s biggest.
Announcing in Singapore that talks for the deal — which formally began in 2012 — are mostly concluded would be “important as a symbol of Asia’s commitment to trade at a time of rising global tensions,” Deborah Elms, executive director of the Asian Trade Center, told AFP.
She said negotiations in some areas were likely to continue into next year, however, while a diplomat attending the summit, speaking anonymously, said “substantial progress” had been made but there were still sticking points.
The gathering of 20 world leaders comes against a backdrop of a months-long trade dispute between China and the United States after Trump imposed tariffs on most Chinese imports this summer, and Beijing retaliated with its own levies.
The standoff is having an impact far beyond the US and China, and leaders at the four days of meetings that begin Monday will be keen to voice their grievances to Vice President Mike Pence, attending in Trump’s place, and Premier Li Keqiang.
Trump’s absence from the Singapore gathering and a subsequent meeting of world leaders in Papua New Guinea is even more notable given Obama, who launched a so-called “pivot to Asia” to direct more US economic and military resources to the region, was a regular participant.
Washington, however, argues that it remains committed to Asia, pointing to regular visits by top officials.
“We are fully engaged,” insisted Patrick Murphy, one of the State Department’s most senior Asia diplomats. “That is very sustained and has been enhanced under the current administration.”
Myanmar’s embattled leader Aung San Suu Kyi is attending the meetings, and will deliver a keynote address at a business forum Monday.
She may face criticism over a military crackdown on the Muslim Rohingya that saw hundreds of thousands flee to Bangladesh last year, and has sparked rare criticism of Myanmar from within regional bloc the Association of Southeast Asian Nations (ASEAN).
Also on the agenda will be North Korea’s nuclear program. Trump and North Korean leader Kim Jong Un signed a vaguely worded agreement on denuclearization at a historic summit in June, but progress has been slow since.
Pence will also keep on pressure on Beijing over its growing aggression in the South China Sea. China claims almost all the strategically vital waters, a source of friction with Southeast Asian states that have overlapping claims as well as the US, the traditionally dominant military power in the region.
Other leaders attending include Russian President Vladimir Putin and Japanese Prime Minister Shinzo Abe.
But much of the focus will be on the RCEP as leaders seek to send a message in support of free trade. The deal groups the 10 ASEAN members plus China, India, Japan, South Korea, Australia and New Zealand.
World leaders “should present a united front advancing trade liberalization in (the Asia-Pacific) despite global headwinds to trade from the rising tide of global protectionism,” Rajiv Biswas, chief regional economist at IHS Markit, told AFP.


Urgency needed to boost Palestinian economy: IMF chief

Updated 26 June 2019
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Urgency needed to boost Palestinian economy: IMF chief

  • The MF has been warning of severe deterioration in the Palestinian economy
  • ‘If there is an economic plan, if there is urgency, it’s a question of making sure that the momentum is sustained’

MANAMA: IMF chief Christine Lagarde said Wednesday that major economic growth was possible in the Palestinian territories if all sides showed urgency, as she took part in a US-led conference boycotted by the Palestinian leadership.
The International Monetary Fund has been warning of severe deterioration in the Palestinian economy, with tax revenue blocked in a dispute with Israel which has also imposed a crippling blockade on the Gaza Strip for more than a decade.
“If there is an economic plan, if there is urgency, it’s a question of making sure that the momentum is sustained,” said Lagarde.
The IMF chief is attending a conference in Bahrain to discuss the economic aspects of a United States plan for Israeli-Palestinian peace, which has already been rejected by the Palestinians as it fails to address key political issues.
Lagarde said for the US plan to work “it will require all the goodwill in the world on the part of all parties — private sector, public sector, international organizations and the parties on the ground and their neighbors.”
Citing examples of post-conflict countries, Lagarde said that private investors needed progress in several sectors including strengthening the central bank, better managing public finance and mobilizing domestic revenue.
“If anti-corruption is really one of the imperatives of the authorities — as it was in Rwanda, for instance — then things can really take off,” she said.
The plan presented by White House adviser Jared Kushner calls for $50 billion of investment in the Palestinian territories and its neighbors within a decade.
The proposals for infrastructure, tourism, education and more aim to create one million Palestinian jobs.
Gross domestic product in the Gaza Strip declined by eight percent last year, while there was only minor growth in the West Bank.
Kushner, opening the conference on Tuesday, called the plan the “Opportunity of the Century” — and said the Palestinians needed to accept it before a deal can be reached on political solutions.
The Palestinian Authority has rejected the conference, saying that the US and Israel are trying to dangle money to impose their ideas on a political settlement.
Washington says it will unveil the political aspects of its peace deal at a later date, most likely after Israel’s September election.