Fyi. What say you on APFTA?
China's Push for an Asia-Pacific Free Trade
Agreement thediplomat.com |
By Shannon Tiezzi
October 30, 2014
October 30, 2014
China’s
foreign minister said on Wednesday that he expects November’s APEC
summit to take up the issue of creating an Asia-Pacific Free Trade Area
(also known as a Free Trade Area of the Asia-Pacific, or FTAAP). FTAAP
would mesh with China’s strategy of promoting regional integration – and
would provide an alternative to the U.S.-led Trans-Pacific Partnership
(TPP) talks, which currently excludes China.
Foreign
Minister Wang Yi made his remarks at the Lanting Forum, which was
billed by China’s Foreign Ministry as “a preview of the theme, agenda,
and outcomes of the 22th APEC Economics Leaders’ Meeting.” According to
Xinhua, Wang said that this November’s APEC summit will see progress on
an Asia-Pacific Free Trade Area. Wang hopes that APEC members will send a
“clear message” on regional economic integration by advancing the
FTAAP.
According
to China’s vision, this massive FTA would effectively overrule the
piecemeal free trade agreements that currently exist (or are under
negotiation) among Asia-Pacific economies. The FTAAP “will help to
integrate regional bilateral and multilateral cooperation mechanisms and
reduce the risk of overlap and fragmentation,” Xinhua paraphrased Wang
as saying. Back in May, when a Chinese Ministry of Commerce official
urged “quick action” on an Asia-Pacific FTA, he argued that this larger
FTA “will solve the problems caused by barriers between different FTAs,
such as distinct rules and requirements.”
The
FTAAP would thus provide an attractive alternative to the TPP, which is
its current form would exclude China, the region’s largest economy.
Given the current stalemate over TPP negotiations (something my
colleague Clint covered in more detail over on the Tokyo Report),
Beijing may be sensing an opportunity to forestall TPP by pushing
forward with a larger, more integrated vision for regional trade.
Some
in APEC, meanwhile, are taking the opposite viewpoint, wondering if
FTAAP is necessary given the multitude of other trade deals already
under discussion. According to the South China Morning Post, APEC
secretariat executive director Alan Bollard said that it might be too
complicated to work on FTAAP alongside all the other trade negotiations
already in progress. “None of the economies want to start negotiating on
the FTAAP. It is far too early to do that,” Bollard said.
The
idea for FTAAP has been around for nearly a decade – for example, in
2006, C. Fred Bergsten of the Peterson Institute for International
Economic argued that an Asia-Pacific FTA “is the next step forward for
APEC.” Despite this, there’s been little progress to date as countries
has pursued smaller multilateral or simply bilateral agreements.
Bollard’s hesitancy indicates China faces an uphill battle to overcome
this inertia.
Still,
China is pushing forward with the idea. SCMP reports that China is
calling for a feasibility study on the FTAAP, which is generally the
first formal step in crafting an FTA. Bollard downplayed expectations,
saying that “we have not yet agreed on the study … We are not at all
clear about what it means.”
From
Beijing’s perspective, the FTAAP means an interconnected Asia-Pacific
region – with China, as the region’s (and soon to be the world’s)
largest economy, naturally at the center. China’s other high-profile
plans for economic integration, the Silk Road Economic Belt and the
Maritime Silk Road, echo the idea that the region’s economies should be
more integrated. Both those initiatives also focus on literal
connectivity – transportation and infrastructure to connect Asia-Pacific
states. China also intends to emphasize this at APEC by pushing for a
“blueprint” for interconnectivity in the Asia-Pacific in both
transportation (highways, railways, air traffic) and regulations.
By
taking the leading role in pushing for economic integration and
interconnectivity, China can also position itself as the leader of this
as yet hypothetical Asian community. In his remarks Wednesday, Wang Yi
emphasized that China and the Asia-Pacific are part of a “community of
shared destiny,” repeating Beijing’s favorite way of conceptualizing the
region.
Under
this concept, China stresses that its success is the main driver for
regional success. China has contributed more than 50 percent of economic
growth in Asia,” Wang pointed out, noting that each percentage point of
economic growth in China lifts the economy of the region by 0.3
percent. Wang also stressed that “China has been working on playing a
constructive role in regional affairs.” As “a member of the Asia-Pacific
family,” Wang said, China accepts the responsibility to promote
regional prosperity and stability.
Last
year, China Power blogger Jin Kai noted that this formulation was
China’s response to the U.S. “rebalance to Asia.” Through its various
initiatives, from economic proposals like the Silk Road Economic Belt
to FTAPP, to political groupings like the Shanghai Cooperation
Organization and the Conference on Interaction and Confidence-Building
Measures in Asia (CICA), China is attempting to establish its leadership
bona fides in the Asia-Pacific region. Once China is established as a
regional leader, both economically and politically, there will be no
further need for the U.S. in the region — or so Beijing hopes.
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