US-China tensions make Asian free-trade deal ‘a priority’

Talks on the Regional Comprehensive Economic Partnership take on renewed urgency in the wake of Trump’s protectionism, says Malaysia’s top trade negotiator

US-China trade war

Bhavan JaipragasandTashny Sukumaran

Published: 2:55pm, 11 Oct 2018

Why you can trust SCMP

The US-China trade war gives Southeast Asia fresh impetus to wrap up negotiations on a Beijing-backed free-trade deal that has been in the works for five years, Malaysia’s top trade negotiator has said.

Norazman Ayob’s comments at the South China Morning Post ’s China Conference in Kuala Lumpur echoed suggestions by regional leaders including Singapore’s Lee Hsien Loong that the 16-nation Regional Comprehensive Economic Partnership may be finalised by the end of the year, after 23 rounds of negotiations stretching back to 2012.

Countries such as Singapore and Malaysia had initially viewed the RCEP as of secondary importance to the United States-led Trans-Pacific Partnership (TPP) – but that has changed since the election of US President Donald Trump, who came to power last year on a protectionist platform.

Youth exchanges could mean China, Malaysia will ‘always be close’

Since Trump pulled the US out of the TPP, that pact has been watered down and rename the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Norazman said the RCEP was now the top priority.

RCEP, with Beijing’s involvement, was previously viewed as a direct challenge to the TPP – which excludes China.

Japanese Prime Minister Shinzo Abe and trade ministers from Asian countries at a Regional Comprehensive Economic Partnership meeting in Tokyo. The RCEP has taken on new urgency since Trump pulled the US out of the Trans-Pacific Partnership. Photo: AP

The RCEP includes the 10 Association of Southeast Asian Nations (Asean) nations as well as China, India, Japan, South Korea, New Zealand and Australia.

Highlights from the China Conference:

While negotiations are ongoing, Norazman said “the conflict between the US and China has provided an impetus [for] an early conclusion of RCEP”.

Trade ministers of the 16 countries are to meet this weekend in Singapore for a fresh round of high level talks after negotiations this week by their chief negotiators.

Why the US trade war against China is bound to fail

Norazman, who is deputy secretary general of the Ministry of International Trade and Industry, is Malaysia’s chief negotiator for the RCEP.

He said there were sticking points among participants such as India, but with economies feeling the pain of the US-China trade dispute, the free-trade deal had been thrust to the top of the agenda of many countries.

Speaking about Beijing’s “Belt and Road Initiative”, Norazman said the plan to connect China with Eurasia had “generated mixed reactions” around the world.

“It is viewed with growing pessimism in relation to the debt trap among certain economies,” he said, referring to growing suspicions that the initiative started by President Xi Jinping in 2013 was being used by Beijing to create client states.

“Malaysia would strongly urge that the Belt and Road Initiative enhance further cooperation programmes in technical and production capacity-building for transfer of technology and knowledge among the nations involved,” Norazman said.

This article appeared in the South China Morning Post print edition as: Push for f ree-trade talks

Post