America the Spoiler, Again

Posted by david on Nov 3, 2014 in Blog | 0 comments

The US doesn’t want China in the Trans-Pacific Partnership (TPP) so China proposes the Free Trade Area of the Asia Pacific (FTAAP).  Of course, then, the US opposes the FTAAP just before Beijing plays host to APEC.  Really makes a mockery of American talk of wanting more cooperation with China!

The U.S. has blocked China’s efforts to use a leaders’ summit to begin negotiations on a free-trade zone spanning the Pacific, people close to the matter said, as the world’s two largest economies tussle over influence in the region and billions of dollars in trade.

China, the host of this year’s Asia-Pacific Economic Cooperation forum on Nov. 10-11, has sought to highlight its expanding international role by pressing for a pact known as the Free Trade Area of the Asia Pacific.

Beijing’s free-trade zone has been on the agenda of APEC for years — and was initially pushed by the U.S. — but has been relegated to the back burner as the U.S. has poured its efforts into the Trans-Pacific Partnership, a trade pact it is negotiating with 11 nations that include Japan but not China.

For Beijing, the FTAAP would offer a way to ensure that it continues to get preferential access to some of its largest trading partners. A TPP deal would cost China about $100 billion a year in lost exports as the partners trade more among themselves and less with China, according to an estimate by the Peterson Institute for International Economics, in Washington.

“China wanted to reinvigorate” FTAAP, said Alan Bollard, executive director of APEC, an association of 21 economies including the U.S., China, Russia and Japan, whose leaders meet annually and whose decisions are taken by consensus. The APEC leaders’ summit next week will be the first major international conference held in Beijing since Xi Jinping took power as Communist Party chief.

Under U.S. pressure, Beijing dropped two provisions from the draft of an APEC communiqué to be released at the end of the leaders’ session, negotiators said. The statement no longer calls for an FTAAP “feasibility study” — trade lingo for starting negotiations—and has no target date to finish the deal. China wanted 2025 as an end date.

– Wall Street Journal