Asian economies discuss trade pact amid rising protectionism

Shinzo Abe (center) joins hands with trade ministers from Asian countries for a group photo

Japanese Prime Minister Shinzo Abe yesterday called for an early conclusion of a regional trade pact that ensures free and rules-based commerce in the face of an increasingly protectionist United States under President Donald Trump.

At a meeting of the Regional Comprehensive Economic Partnership, or RCEP, which is co-chaired by Japan and Singapore, trade ministers and officials from 16 Asian countries agreed to speed up negotiations on outstanding issues and reach a basic agreement by the end of the year.

Japan seeks to take leadership in shaping the pact as an alternative to a Pacific Rim free-trade grouping that Trump abandoned early this year.

At a joint news conference after the talks, Japanese Economy, Trade and Industry Minister Hiroshige Seko and his Singaporean counterpart, Chan Chun Sing, noted there are differences that still need to be resolved, but the participants see achieving a pact as a chance to show Asia’s commitment to defend free trade.

“This is indeed a moment for us to seize the opportunity against a global backdrop where we are facing headwinds in the trade relationships and the trade regimes,” Chan said. Achieving a pact would be a powerful statement to show what RCEP countries stand for, he said.

In a joint statement, the ministers said achieving a pact is important especially “in view of the current global trade environment, which faces serious risks from unilateral trade actions and reactions, as well as their debilitating implications on the multilateral trading system.” They also pledged to seek breakthroughs in politically challenging areas.

In his opening remarks earlier yesterday, Abe said a pact among the countries that together make up half the global population has enormous growth potential.

“As we are faced with concerns of the rise of protectionism in the world, all of us in Asia must unite, and our future depends on whether we can keep hoisting our flagship principle of free and fair trade,” Abe told the meeting in Tokyo. “Let us be as one and achieve a free, fair and rules-based market in this region.”

Trump, who says he prefers bilateral deals, has pulled the U.S. out of the Trans-Pacific Partnership, leaving the remaining 11 countries, from Chile to New Zealand, to work on a revamped version of that pact.

Trump has imposed high tariffs on steel and aluminum imports and has threatened to add automobiles to reduce America’s trade deficit. He has singled out Chinese products, prompting fears of a trade war.

Japan, already hit by increased U.S. steel and aluminum tariffs, has told the World Trade Organization that it may retaliate against U.S. goods totaling about 50 billion yen (USD450 million). Japan’s government warned the U.S. Department of Commerce on Friday that a higher U.S. tariff on auto imports could backfire, jeopardizing hundreds of thousands of American jobs created by Japanese automobile industry-related companies, raising prices for U.S. consumers and causing a disaster for the U.S and global economy.

Trump’s moves have resonated in Asia, where many countries have prospered thanks to free trade and the expansion of global supply chains.

Members of the initiative, launched in 2013, have struggled with issues including tariffs, trade in services and investment rules, as well as protection for intellectual property rights. Japan is also cautious about China’s influence. China, which is not part of the TPP, plays a key role in RCEP.

RCEP also includes Southeast Asia, Australia, New Zealand, India and South Korea. Mari Yamaguchi, Tokyo, AP