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Officials said this week that China has proposed studying the feasibility of a mammoth free-trade agreement in the Asia-Pacific region in addition to the contesting FTA’s, the US-led TPP and the China-led RCEP.
“We made a proposal to establish a working group to study the feasibility of a Free Trade Area of the Asia Pacific, and we have received responses from many members of the Asia-Pacific Economic Cooperation forum,” Wang Shouwen, assistant Commerce Minister was quoted by China Daily in Beijing.
“Having too many FTAs in the region would set up different standards and create the ‘Noodle Bowl Syndrome’ — a disorganized tangle of bilateral trade deals — and thus hinder regional businesses. It’s necessary to build up a mega FTA,” Wang said.
China has said it will move the APEC to constitute this working group possibly comprising of government officials and business representatives from various Asia Pacific nations. This will be discussed at the APEC Trade Ministers Meeting to be held in Qingdao in China on May 17 and 18.
Beijing is claiming that this mega Asia Pacific FTA, proposed as early as 2006, is “not in conflict” with the TPP or the RCEP as both are “possible routes to it” and will aim to lower trade barriers across the region.
The China-led RCEP is a 16-nation trade bloc which includes the ASEAN plus China, India, Japan, South Korea, Australia and New Zealand.
“We’re organising trade relations with countries other than China so that China starts feeling more pressure about meeting basic international standards,” Obama said referring to the TPP in a presidential debate in 2012.
The RCEP and TPP and a host of other FTA negotiations sprung up after a decade of talks failed to conclude a global trade deal, the so-called Doha Round.
By pushing for a wider deal in the Asia Pacific that would equal the EU, China would also steal a march over the TPP championed by President Barack Obama’s administration.
Writing for The BRICS Post, host of RT‘s flagship programme CrossTalk, Peter Lavelle says Washington is most interested in corralling its strategic military allies within the Pacific Rim into a trading bloc that is demonstratively at odds with Beijing’s trading interests.
“In a very meaningful way the US is creating a red line with the global trading system. China will not let this stand. But what is ahead will not be an all-out trade war embroiling Washington and Beijing. China didn’t become the second largest economy by accident – expect a robust (by Chinese standards) response to Washington,” says Lavelle.
However, if the Asia-Pacific FTA succeeds in materializing, it would finally bring the United States and China into an agreement to deepen trade liberalization, after more than a decade of failed talks.