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China pushes free trade plans at summit rattled by Trump

China’s President Xi Jinping giving a speech during a session of the APEC CEO Summit, part of the broader Asia-Pacific Economic Cooperation (APEC) Summit in Lima © APEC PERU 2016/AFP / STR

Lima, Peru, Nov 20 – Chinese President Xi Jinping pushed Beijing’s free trade plans Saturday at a summit of Asia-Pacific leaders, stepping up to fill the void left by US President-elect Donald Trump’s protectionism.

Trump’s victory is making it a rocky ride into the sunset for Barack Obama, whose last foreign visit as US president — to an annual summit of the Asia-Pacific Economic Cooperation (APEC) group in Lima, Peru — has been full of awkward questions from fellow leaders.

Trump’s attacks on free trade deals and vows to cut back the US role as “policeman of the world” are causing jitters in the Pacific Rim, where the United States and China battle for influence.

Obama met Saturday with leaders of the 12 countries in the Trans-Pacific Partnership, or TPP, a vast US-led trade accord that Trump opposes and which now faces an uncertain future.

The billionaire mogul campaigned against the proposal as a “terrible deal” that would “rape” the United States by sending American jobs to countries with cheaper labor.

In a Pacific region hungry for trade, that has left even longtime US allies looking to China — which was notably excluded from the TPP — to fill the void.

Graphic comparing size of economy and proportion of export trade for the 21 memebers of APEC. © AFP / John SAEKI, Gal ROMA

Beijing is pushing two alternatives: the 21-member Free Trade Area of the Asia-Pacific (FTAAP) and a 16-member Regional Comprehensive Economic Partnership (RCEP), which notably includes India but not the United States.

Xi urged regional leaders to advance both deals at the summit.

“We should firmly pursue FTAAP,” he said in a keynote address. “Openness is vital for the prosperity of the Asia-Pacific.”

In the face of Trump’s protectionist rhetoric, he vowed China “will not shut its door to the outside world, but open it even wider.”

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“We will fully involve ourselves in economic globalization by supporting the multilateral trading regime, advancing the FTAAP and working for the early conclusion of the negotiations on the Regional Comprehensive Economic Partnership,” he said.

– Trump the pragmatist? –

From Obama down, US officials have stressed that the election has not changed the country’s economic and strategic interests, and that Trump may yet recalibrate his views.

US President Barack Obama speaks during a meeting with students at the Pontifical Catholic University of Peru in the sidelines of the Asia-Pacific Economic Cooperation Summit in Lima on November 19, 2016 © AFP / Martin Bernetti

“How you campaign isn’t always the same as how you govern,” Obama told a town hall meeting of young Latin Americans in Lima.

Many leaders seem to be hoping as much within APEC — a 21-member free trade club that accounts for nearly 40 percent of the world’s population and nearly 60 percent of the global economy.

New Zealand’s Prime Minister John Key said he was banking on Trump taking a pragmatic turn away from the extremes of his campaign.

“I personally think that President Trump will be like chairman of the corporation Trump,” he said.

Mexican President Enrique Pena Nieto — whose country has been the target of some of Trump’s harshest vitriol — said he would seek “dialogue” with the president-elect to safeguard the neighbors’ crucial trade relationship.

Trump insulted Mexican immigrants as criminals and rapists during the campaign, vowed to force Mexico to pay billions of dollars to build a wall along the border, and threatened to restrict remittances that immigrants in the United States send home.

– Turning to China –

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It is unclear whether there is any future for the arduously negotiated TPP.

The White House said Obama had “urged his fellow leaders to continue to work together to advance TPP.”

But many experts say Trump’s attacks on the deal and his Republican allies’ control of Congress mean it is dead in the water.

Some leaders and experts said TPP could still be saved in some version.

Other allies are turning their attention to China’s rival plans.

Japanese leader Shinzo Abe, who took domestic political risks to back TPP, visited Trump in New York on Thursday to hear from the president-elect himself.

The demise of TPP will hit especially hard in emerging economies like Vietnam and Malaysia, said Gareth Leather, an economist at consultancy Capital Economics.

“The benefits of a China-led regional trade deal are likely to be much smaller,” he said in a note.

“The retreat on the part of America has created an opportunity for China, which was not part of the TPP negotiations, to expand its influence in Asia.”

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