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TRADE WARS
China eyes front against protectionism at G20
by Staff Writers
Beijing (AFP) June 24, 2019

What is the RCEP trade deal and could it be signed this year?
Bangkok (AFP) June 22, 2019 - Led by China -- and excluding the United States -- the sprawling Regional Comprehensive Economic Partnership (RECP) is poised to become the biggest global trade deal, linking half the world's people and marking Beijing's dominance in Asian trade.

The long-awaited deal is expected to be discussed at the Association of Southeast Asian Nations' leaders meeting this weekend in Bangkok.

What is RCEP?

Launched in 2012, RCEP is a trade pact between the 10-member ASEAN bloc, along with China, Japan, South Korea, Australia, New Zealand and India.

It links around 3.4 billion people and when signed will be the world's biggest free trade pact.

It is also expected to cover about a quarter of the world's exports.

Its aim is to break down trade barriers and promote investment to help emerging economies catch up with the rest of the world.

Why does it matter?

It mainly matters because it doesn't include the United States -- and is notably being led by Beijing.

Observers say it will cement China's domination over its backyard, where it faces little competition from America since President Donald Trump pulled out of a trade pact of its own.

That deal, called the Trans-Pacific Partnership (TPP), was on track to be the world's biggest trade pact, until Washington pulled the rug out from under it, saying it funnelled off US jobs.

The US now says it is focusing on bilateral agreements with Asian nations, and insists it is not retreating from the region.

But with Washington and Beijing embroiled in a trade spat of their own, RCEP's backers are hoping to finalise the deal soon.

The call comes even as a hollowed out version of the TPP moves ahead without the US, and the economic clout it brings.

What are the sticking points?

There are a few.

Australia and New Zealand are pushing for so-called high quality rules around labour and environmental protections.

Strengthening intellectual property terms is another issue.

And India fears the deal means its market will be flooded with Made-in-China goods that will hurt domestic manufacturers.

Pushing the deal through will largely come down to China and India, a Southeast Asian diplomat told AFP.

"They are effectively negotiating a bilateral free trade agreement within RCEP, they are playing out their issues," the diplomat told AFP, requesting anonymity.

So far, seven of the 18 RCEP chapters have been concluded, and Thailand is pushing to have the deal done this year.

Can it really be signed this year?

The ASEAN bloc is eager to conclude the deal this year.

But with negotiations grinding on since 2013, some analysts are doubtful it will be done before the end of the year.

Unless China and India see eye-to-eye, "RCEP is not going anywhere", Michael Michalak, regional managing director of the US-ASEAN business council told AFP.

And fears are mounting the deal could fizzle out.

The Southeast Asian diplomat told AFP that if RCEP is not finalised this year, it will be "dead in the water" and China could push ahead with smaller trade deals with the ASEAN bloc.

China said Monday it would seek backing for free trade and multilateralism at the G20 summit this week as it denounced protectionism while it fights a tariffs war with the United States.

A meeting between Xi Jinping and his Donald Trump on the sidelines of the gathering in Osaka, Japan has fuelled hopes for a truce in the increasingly damaging standoff between the world's top two economies.

"Unilateralism and protectionism has damaged global growth... undermined global value chains and dampened market sentiment," Zhang Jun, the Chinese assistant minister of foreign affairs, said at a briefing to preview Xi's attendance at the summit.

"China will work with others at the G20 to firmly uphold multilateralism and an open, rule-based global trading order," Zhang said.

But Japan, the European Union and other trading partners have in the past echoed US complaints about the alleged theft of intellectual property and lack of a level playing field for foreign investors in China.

Any attempts to build a united front with China will be tempered by these concerns.

Negotiations to resolve the trade war stalled last month resulting in both sides exchanging steep tariffs on hundreds of billions in exports.

Chinese vice minister for commerce Wang Shouwen said teams from both sides are now "discussing the next step for communication" ahead of the Xi-Trump meeting.

The two should make compromises and any talks between China and the US have to be based on "mutual respect, equality and mutual benefit and comply with WTO rules", Wang said.

The two leaders are also expected to discuss the fate of Chinese tech giant Huawei, which has suffered a heavy blow after the Trump administration banned US firms from working with it, citing espionage fears.

Wang urged the US to remove "inappropriate and discriminatory" barriers against Chinese companies, saying such moves jeopardise the interests of both Chinese and US companies.

The planned meeting comes a week after Xi visited nuclear-armed North Korea, and analysts said any influence he may have on Pyongyang's isolated leader could be used as leverage to win consensions from Trump.

Zhang declined to confirm whether North Korea will be on the agenda for the Trump-Xi head-to-head, saying they were still "finalising the details".

He also said China will "not allow" a discussion on Hong Kong at the G20 even as Washington said Trump plans to raise the city's mass protests in his meeting with Xi.

Protectionism slammed as Southeast Asian leaders rally to trade pact
Bangkok (AFP) June 23, 2019 - Southeast Asian leaders made an impassioned plea against protectionism at a regional summit in Bangkok Sunday, warning that a dragging US-China trade spat could hammer their export-led economies.

Tit-for-tat tariffs between Washington and Beijing have cast a dark cloud over global growth forecasts and experts warn any drop-off in spending by the world's two biggest economies is likely to hit Southeast Asia hard.

Regional leaders are alarmed over "the unabating tide of protectionism", according to the final statement of the Association of Southeast Asian Nations (ASEAN) summit that closed Sunday in Bangkok.

"The winds of protectionism are hurting our multilateral trading system," Thailand's junta leader-turned-premier Prayut Chan-O-Cha said.

He added the bloc would carry their trade conflict concerns to a G20 meeting in Japan next week.

Leaders also called for urgency in concluding talks on a China-led trade pact this year, which once inked will be the world's biggest.

The Regional Comprehensive Economic Partnership (RCEP) includes all 10 ASEAN economies, plus India, Japan, South Korea, Australia and New Zealand.

"It (RCEP) will help off-set any impact from the ongoing trade conflict," said Prayut.

The pact is seen as a mechanism for China to draft the rules of Asia-Pacific trade, following a US retreat from the region as it withdrew from another trade pact at the start of President Donald Trump's administration.

But progress has stuttered in recent months, with India digging in over fears cheap Chinese goods could flood its massive consumer markets.

Other issues, including dispute settlement and the exclusion of certain goods, still need to "ironed out", said a Malaysian Foreign Ministry official Sunday.

"We've missed the target to sign RCEP for quite a number of years already," Muhammad Shahrul Ikram Yaakob told reporters.

- Splits over Rohingya -

A controversial plan to repatriate the persecuted Rohingya minority and ongoing tussles in the disputed South China Sea were also tackled by leaders at the summit, which Thailand is chairing this year.

ASEAN leaders often put out an image of unity during the annual summits.

But the forum has been criticised for allowing diplomatic niceties to outweigh concrete action on the sharpest problems facing the region.

One of those is the return of Rohingya Muslims to Myanmar from squalid refugee camps in Bangladesh, where more than 740,000 have fled since a 2017 army crackdown on the stateless minority.

Malaysia has been the bloc's most outspoken member on the issue and it called for "citizenship" to be a cornerstone of any repatriation plan.

That flies in the face of Myanmar's official policy, which denies the Rohingya full citizenship and the accompanying rights, instead labelling them "Bengalis" -- illegal migrants from Bangladesh.

ASEAN has come under fire for suggesting the refugees will repatriate within two years. Virtually none have volunteered to return to Myanmar so far, citing safety concerns and lack of citizenship.

A final statement from the weekend summit said ASEAN leaders supported Myanmar's efforts to "facilitate the voluntary return of displaced persons in a safe, secure and dignified manner".

The statement did not include the term Rohingya.

Disputes in the flashpoint South China Sea also emerged at the summit, where the Philippines protested Beijing's sweeping claims in the resource-rich waterway.

Philippines president Rodrigo Duterte said he was "disappointed" that a much-delayed code of conduct between ASEAN countries and China has seen little progress.

Without such a blueprint there was a greater chance "for miscalculations that may spiral out of control," he added.

A "Bangkok Declaration" on combatting marine waste was also endorsed at the weekend summit, though environmentalists argued it does not do enough to reduce the region's mounting plastic problem.


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China's global Belt and Road Initiative could boost economies and reduce poverty rates in dozens of developing countries, but risks environmental damage, debt and corruption if improvements aren't made, the World Bank said Wednesday. President Xi Jinping's signature foreign policy aims to reinvent the ancient Silk Road to connect Asia to Europe and Africa through massive investments in maritime, road and rail projects - with hundreds of billions of dollars in financing from Chinese banks. Criti ... read more

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