WASHINGTON - The results of several key elections in Asia this year will determine whether negotiations over an Asean-led mega trade pact can be wrapped up this year, said Minister for Trade and Industry Chan Chun Sing on Wednesday (March 20).
Australia, India, Indonesia and Thailand, which form a quarter of the Regional Comprehensive Economic Partnership’s (RCEP) 16 members, are due to hold national elections from March to May.
“All these elections will be done by May, and then we will have clearer sight of the political will by new or existing governments to complete the task ahead. The gaps are narrowing and we have a fair chance of getting it done by this year,” Mr Chan told 100 business leaders and diplomats at a lunch event in Washington DC, where he is on an official visit until Thursday.
But the RCEP is more than just about economic benefits, said Mr Chan. He framed the trade pact as part of an international conversation about the viability of free trade and the measures governments must take to alleviate inequality as a side effect of globalisation.
“There is an urgency for the countries to come together...to say we all continue to believe in the multilateral system and rules-based open trading system. That statement of intent is very important to the global trading economy...all 16 countries understand this part,” he said at the event organised by the US-Asean Business Council.
The RCEP, which consists of the 10-nation Asean bloc and its trading partners Australia, China, India, Japan, New Zealand and South Korea, would cover 30 per cent of global trade. But it has been mired in delays since the formal start of negotiations in 2012, and just seven of its 18 proposed chapters had been concluded as of November last year.
Mr Chan also discussed US leadership in the world of institutions and business, as well as the challenges of free trade and opportunities in the digital economy, during the two-hour lunch attended by leaders such as US Transportation Secretary Elaine Chao and Undersecretary of Commerce for International Trade Gilbert Kaplan.
Political leaders must muster the political will and resources needed to help those who have fallen behind adjust to free trade, said Mr Chan.
“If the broad middle is unable to benefit absolutely or relatively, they will not support globalisation or more free trade agreements,” he said. “Until and unless we can do that, local pushback will have global consequences.”
But if political leaders cannot put these issues squarely to people and make long-term decisions to help workers and companies deal with globalisation, he said, then there will be no strong political base undergirding free trade.
In this situation, there will be “many calls to shut the gates, keep out the barbarians, and think we will live happily ever after”, he said, adding: “That's the common anger we confront today.”
Mr Chan also urged American leaders to continue to support international rules and look beyond trade numbers, a reference to US President Donald Trump’s focus on trade surpluses and deficits.
Said the minister: “What makes America great is not just a set of trade numbers. What makes America great is the innovation present in this economy fuelled by the free flow of talent and ideas, energy, and spirit of American enterprise.
“American leadership in the world is determined by the role you play in international institutions to create the rules for the international community to have predictable and lawful environment to do business. They really define how great America will be,” he said.