Former US TPP Chief Negotiator Speaks at CCG about Asian Pacific Economy and Trade Prospect

Wendy Cutler, Vice President of the Asian Society Policy Institute (ASPI) and Former US TPP Chief Negotiator, visited the CCG headquarters on Jan. 22, 2018, and led a discussion about ASPI’s recent study report on Asian Pacific economic and trade development.

At the seminar “Asia Pacific: Looking Ahead Roundtable Conference,” Mrs. Culter shared her views about the current situation and prospect of Asian Pacific economic and trade relations, development of regional free trade agreements, and international free trade initiatives under WTO and TPP framework.

She also exchanged her ideas with CCG senior fellows, including former Commercial Counselor at Chinese Consulates General in San Francisco and New York He Weiwen, former Minister for trade and economic affairs of the Chinese Embassy to the United States He Ning, and former Director of European Department of the Chinese Ministry of Commerce Sun Yongfu.

Based on the ASPI study report “Shifting Trade Winds–U.S. Bilateralism and Asia-Pacific Economic Integration”, Mrs. Cutler proposed several measures to meet the challenges to multilateral trade system, including:

■  The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) members should bring the agreement into force without the United States to capitalize on the accomplishment of TPP negotiations; and the United States should reconsider its position on the TPP.

■  In view that Regional Comprehensive Economic Partnership (RCEP) negotiations are approaching the end, RCEP members are advised, in line with RCEP’s own principles and objectives, to negotiate a high-quality agreement.

■  Regional trade agreements are the best approach to promote free trade, raise trade standard and push forward the reforms. That being said, bilateral agreements also have their advantage. The countries that are interested in bilateral agreements should pursue higher standard and remain open to other agreements. Also, the two parties should, through coordination and consultation, fully understand each other’s expectation and limit to ensure a smooth negotiation.

■  The countries in multilateral trade agreement negotiations should focus their work on emerging trade issues such as digital trade, noting that APEC is particularly well-positioned to do so.

■  If the free trade negotiation members want to renew the process, they should focus the renegotiation and adjustment on updating the rules and expanding market access, instead weakening the previous commitment.

■  Regional and global policymakers should more proactively support trade activities, and more effectively communicate the benefits of trade agreements, instead blaming other countries for trade protectionism and imbalance. They should realize no country has a perfect trade record. Also, they need to bear in mind that although trade has benefited the world extensively but not equally to everyone in economic globalization. The countries are urged to proactively pursue appropriate domestic policies, in parallel with trade agreements.

CCG senior fellow He Ning agreed to ASPI policy proposal, and also believes that multilateral system is still playing a dominant role in the world free trade. It is still likely that America will return the multilateral trade system in the future. However, he noted that more efforts are still needed in China, America and other countries to increase policymakers and public understanding of multilateral trade system, especially young people.“We cannot enjoy the benefit from open market, while complaining about it.”

He Weiwen suggested that US President Trump should not focus the trade issues on deficit, which cannot help in any way but lead to the escalation of trade conflicts and misperception. He believes China and the United States should be more focused on the analysis and assessment of trade policies in specific industries, instead of continuing with the confrontation at macro-level trade policies.

Huo Jianguo, the Vice Chairman of China Society for WTO Studies, acknowledged the great value of ASPI report and pointed out the growing challenges to deal with the relations between the multilateral trade system represented by WTO and regional trade schemes through free trade agreements. He expected RCEP to reach a consensus on major issues in 2018, but considering the differences among China, Japan, India and ASEAN member states, many details of the agreement cannot be sorted out anytime soon.

Jiang Shan, the former Director of US and Canada Department of the Chinese Ministry of Commerce, raised his doubt about the impact of a TPP without the United States. From his observation, the Trump administration has shown a protectionism tendency but not yet isolationism. Despite all the uncertainties of his trade policies, Asian Pacific countries welcome the United States to return to TPP and WTO.

Based on the current situation in global trade, Professor Cui Fan from the University of International Business and Economics recommended that China can integrate some TPP provisions in RCEP negotiation, since those rules already have significant impact on global trade. In addition, he suggested the policymakers to base their future free trade agreement negotiation on the principle of WTO most-favored-nation treatment, considering that some countries do not follow this rule. For instance, the United States opens their market of some industries to EU, but not to China, which is unacceptable.

In summary, CCG President Wang Huiyao spoke positively of the possibility for China to join TPP. There have been some concerns that TPP standards are too high for China to comply. But, some of the provisions were revised after Japan took over the lead. He emphasized that TPP is not necessarily considered a rival against RCEP, and China may have a chance to join both initiatives to push forward global free trade. In addition, he believes there remain possibilities for the Sino-US cooperation in WTO, especially in the cyber affairs, which can bring them mutual benefits.