Tuesday, November 15, 2016

Asia Trade Focus Shifts From U.S. to China Led Accord

By Yantoultra Ngui

Nov. 15, 2016 12:10 a.m. ET

http://www.wsj.com/articles/asia-trade-focus-shifts-from-u-s-to-china-led-accord-1479186626

The Yangshan Deep Water Port, part of the Shanghai Free Trade Zone in China Photo: aly song/Reuters 
     
           After Donald Trumps win, Malaysia said it would deepen trade ties with China and other countries. Malaysia appeared to be the first Asian country to shift its focus toward a proposed China-led trade group rather than the 12 nation Tans-Pacific Partnership Agreement (TTP), which the Obama administration freighted with strategic significance as a counterweight to China's rise. However, during his campaign, Trump outlined a more isolationist and protectionist vision for the United States. Therefore, Malaysia's trade minister said his government would focus its hopes on the Regional Comprehensive Economic Partnership, a group led by China. The status of this would be discussed during a summit of Asia-Pacific leaders in Lima, Peru next week. China says it will seek support from the  Beijing-led free-trade area in the Asia-Pacific summit. President Obama is scheduled to attend the summit.
         China is not a part of the TPP. Japan  a TPP member, will consider renegotiating the TPP without the U.S. However,  Prime Minister Shinzo Abe still believes the TPP has a chance and will try to make the case for it to the Trump administration. The TPP, requires ratification of at least six different countries, accounting for 85 per cent of the total GDP of the member 12 countries to come into force. The U.S alone consists of 60 per cent of that. Therefore, the Obama administration has warned that failure of the TPP can result in China winning trade advantages at the expense of the U.S.

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