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

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.


General Motors and workers union contract expires, increases risk of strike

Updated 33 min 58 sec ago

General Motors and workers union contract expires, increases risk of strike

  • Union officials told General Motors they would let the contract lapse just before midnight Saturday
  • A strike by 49,200 union workers would bring to a halt GM’s US production

DETROIT: The four-year contract between General Motors and the United Auto Workers has expired as negotiations on a new deal continue.
Union officials told GM they would let the contract lapse just before midnight Saturday, increasing the risk of a strike as early as Sunday night. Union members working Sunday were to report as scheduled.
But there was a wrinkle. About 850 UAW-represented janitors who work for Aramark, a separate company, went on strike Sunday after working under an extended contract since March of 2018, the union said.
The strike covered eight GM facilities in Ohio and Michigan. Although UAW workers at GM are supposed to work, it wasn’t clear early Sunday whether the rank-and-file would cross their own union’s picket lines. GM said in a statement that it has contingency plans for any disruptions from the Aramark strike.
UAW Vice President Terry Dittes said in a letter to members that, after months of bargaining, both the union and GM are far apart on issues such as wages, health care, temporary employees, job security and profit-sharing.
The union’s executive leaders and a larger group of plant-level officials will meet Sunday morning to decide the union’s next steps.
The letter to members and another one to GM were aimed at turning up the pressure on GM negotiators.
“While we are fighting for better wages, affordable quality health care, and job security, GM refuses to put hard working Americans ahead of their record profits,” Dittes, the union’s chief bargainer with GM, said in a statement Saturday night.
Kristin Dziczek, vice president of the Center for Automotive Research, an industry think tank, said the union could strike at GM after the contract expires.
“If they’re not extending the agreement, then that would leave them open to strike,” she said.
But GM, in a statement Saturday night, still held out hope for an agreement, saying it continues to work on solutions.
“We are prepared to negotiate around the clock because there are thousands of GM families and their communities — and many thousands more at our dealerships and suppliers — counting on us for their livelihood. Our goal remains on building a strong future for our employees and our business,” the GM statement said.
A strike by 49,200 union workers would bring to a halt GM’s US production, and would likely stop the company from making vehicles in Canada and Mexico as well. That would mean fewer vehicles for consumers to choose from on dealer lots, and it would make it impossible to build specially ordered cars and trucks.
The union’s executive board was to meet early Sunday to talk about the union’s next steps, followed by a meeting in Detroit of plant-level union leaders from all over the country. An announcement was scheduled for after the meetings end.
If there is a strike, it would be the union’s first since a two-day work stoppage at GM in 2007.
The move by the union also comes as it faces an internal struggle over a federal corruption investigation that has touched its president, Gary Jones. Some union members are calling for Jones to step down while the investigation continues. But Friday night, union leaders did not remove Jones.
Union officials surely will face questions about the expanding investigation that snared a top official on Thursday. Vance Pearson, head of a regional office based near St. Louis, was charged with corruption in an alleged scheme to embezzle union money and spend cash on premium booze, golf clubs, cigars and swanky stays in California. It’s the same region that Jones led before taking the union’s top office last year. Jones has not been charged.
On Friday, union leaders extended contracts with Ford and Fiat Chrysler indefinitely, but the pact with General Motors was still set to expire Saturday night.
The union has picked GM, which is more profitable than Ford and Fiat Chrysler, as the target company, meaning it’s the focus of bargaining and would be the first company to face a walkout. Picket line schedules already have been posted near the entrance to one local UAW office in Detroit.
Talks between the union and GM were tense from the start, largely because GM plans to close four US factories. The union has promised to fight the closures.