Eric
Chiou
The year of 2017, from
various perspectives, can be viewed as a critical test for the development of
regional integration in the Asia-Pacific. Although numerous challenges have
appeared and, to different extents, obstructed the further progress of regional
integration in the area, the fact shows that the determination of most
countries in the Asia-Pacific region to continue deepening regional economic
integration has not been wavered. The most significant evidence is that the Declaration
of the 2017 APEC Economic Leaders’ Meeting has indicated no sign of retreating
back from APEC’s consistent commitment on facilitating a free and open regional
environment.
As an APEC host member in
2017, Viet Nam proposed the theme of “Creating New Dynamism, Fostering a Shared
Future” as APEC’s annual objectives, which appropriately reveals what APEC
members desperately need in the recent years of economic uncertainty, due to
increasingly prevalent trend of anti-globalization. Indeed, in the aftermath of
the 2008 Global Financial Crisis, the world economy has not totally recovered
from the greatest recession since the 1930s, but remained weak and fragile.
Hence, it is critical for countries to make collective actions and to pursue
new dynamism for fostering the global economy.
On the other hand, owning
to the devastated consequences of the 2008 Global Financial Crisis, for
preserving national interests, many countries have turned their sails toward
the direction protectionism. In other words, free trade, economic
globalization, and regional economic integration have no longer been perceived
as self-evident maxims, but the subjects need to be reexamined and
reconsidered. In other words, the vision of global economic future is no longer
the same among states, neither is an ultimate goal that most states would
pursue and cherish. As a result, APEC needs to “foster a shared future” to
prevent the further deterioration of economic disarray in the region.
In the
year of 2017, several challenges have posed negative impacts on the progress of
regional integration in the Asia-Pacific region, and therefore undermined the
achievements that APEC has been accomplished in the past decades. The first
challenge comes from the US president, Donald Trump and his American First
Policy, as well as his preference of unilateralism and denouncement of
multilateralism.
Although he merely came to power less than one
year, Trump’s trade policy has brought significant and overwhelming impacts on
the direction of the global economy. Right after his inauguration, Trump waited
no time to withdraw the US from the Trans-Pacific Partnership (TPP) and left
other 11 TPP members to wonder about the future of this pending trade pact. In
addition, the Trump administration also intends to reopen negotiations with its
FTA partners in order to maximize its national interests. South Korea and the
other two members in the North American Free Trade Agreement (NAFTA), Canada and
Mexico, were forced to surrender to US pressures and agreed to renegotiation.
The US unilateral trading policy and conducts have not only impeded progress of
regional integration, but also induced more unstable factors in the world
trade.
The second challenge in
the region is the further postponement of the conclusion of the Regional
Comprehensive Economic Partnership (RCEP). In 2010, APEC had indicated that
both TPP and RCEP are pathways to APEC’s final goal of the Free Trade Area in
Asia-Pacific (FTAAP). Since Trump decided to withdraw from TPP, RCEP has been
highly expected as the last resort to save regional integration from a total
collapse in this region. Nevertheless, the unbridgeable divide between RCEP
members have let its negotiation extremely difficult to achieve consensus. Therefore,
the conclusion of RCEP has been postposed again to 2018. The expectation of
RCEP to play a major role in leading regional economic integration in the
Asia-Pacific region has proved in futile.
Nevertheless, despite
two challenges mentioned above, some encouraging signs are worthy of noticing
in terms of regional integration. The first is the revival of TPP, despite no
US participation. The TPP-11 countries have reached an agreement in November
and decided to replace TPP with the new name, “the Comprehensive and
Progressive Trans-Pacific Partnership” (CPTPP), representing this new regional
integration initiative without the US.
This development reveals
that despite the lack of the US, other 11 TPP members are still willing to keep
their commitments to fostering regional integration, which implies that the
majority of TPP members consider that the establishment of this regional
integration initiative is largely beneficial to them. In other words, the US
unilateralism and protectionist tendency have not deterred other countries from
making efforts to deepen regional economic integration.
The second is that
China becomes a self-appointed vanguard of global free trade and a defender of economic
globalization. Relevant remarks regarding Chinese trading policy can be seen
from the Chinese president Xi Jinping’s speech in the APEC Leaders’ Summit this
year. Though oddly, but not surprising, China assumes the leadership of
economic globalization which is discarded by the US, and proclaims its
steadfast commitment to free trade and open markets. After all, China is the
largest beneficiary from the latest economic globalization in the recent
decades. Maintaining an open global market as well as free flows of trade and
investments certainly fits its national interests and economic goals.
In contrast, the
US is properly the victim of the recent globalized economy. Due to the growth
of outsourcing and the loss of manufacturing jobs, these developments have
severely eroded the fundamental health of American economy, which have not only
triggered serious problems of unemployment and social instability, but also
worsened US trade deficit and increased US debt. Hence, it is understandable
why the Trump administration has decided to turn its back on the WTO and adopts
unilateral or bilateral approaches to pursue its interests.
The final is the
APEC’s commitment on promoting a free and open trade and investment in the
Asia-Pacific region. In this year’s APEC Leaders’ declaration, despite US objection,
APEC leaders have overcome discords and reached consensus on advancing free and
open trading and investment, which shows that most APEC members have decided to
pursue the approach of deepening regional integration.
In the world of mounting
economic uncertainty, it is critical and vital for APEC to unwaveringly persist
the path of further free and open market environment, since this path will
bring benefits to most countries in the region. Meanwhile, as APEC makes its
commitment on further trade liberalization, it is also important for APEC to be
considerate to understand the concerns and anxieties from some countries which
experience negative impacts from regional integration. After all, a prosperous
and durable economic development in the Asia-Pacific region should positively
contribute to all countries' economic growth in the region, which is the only
way that APEC could earn more robust and comprehensive support from members in
the region.
(Eric Chiou is an Assistant Professor of National Chiao Tung
University)
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