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【Bloomberg】APEC Trade Ministers Omit Protectionism Pledge in Statement

Tuesday,May 23, 2017

Trade ministers attend a press conference during the Asia-Pacific Economic Cooperation (APEC) Ministers Responsible For Trade (APEC MRT 23) meeting in Hanoi on May 21, Photographer: Kham/AFP via Getty Images

Asia-Pacific trade ministers issued a diluted “actions” statement after a weekend meeting in Vietnam, suggesting further pressure from the U.S. to avoid explicit pledges to combat protectionism.

The statement came after a dispute over wording, particularly whether to include language about protectionism. Instead, the Asia-Pacific Economic Cooperation document focused on issues like regulation and red tape.

“We call on officials to accelerate work to deepen APEC’s structural reform agenda to remove barriers to trade and investment,” it said.

The outcome contrasted with a ministerial meeting in Peru in November. “We reaffirm the pledge made by our leaders against protectionism through a standstill commitment that we recommend be extended until the end of 2020 and to roll back protectionist and trade-distorting measures, which weaken trade and slow down the progress and recovery of the international economy,” the Peru statement said.

The Hanoi talks follow multilateral gatherings where the U.S. has pushed for softer language about protectionism, and shows President Donald Trump’s administration, which is seeking to renegotiate key trade agreements, continues to challenge prevailing economic doctrine.

Speaking at a briefing on Sunday in Hanoi, U.S Trade Representative Robert Lighthizer said his country faced a huge trade deficit and warned it would fight against “unfair trade.” The U.S. would stick by its decision to pull out of the Trans-Pacific Partnership trade pact.

“That does not mean we will not engage in this region,” Lighthizer said. "The President thought it was so important that I come here and demonstrate to this region how important it is to the U.S. to be involved.”

‘You Guess’

Vietnam’s Industry and Trade Minister Tran Tuan Anh said at the same briefing the 21-member APEC strongly supported the multilateral trading environment, while warning of "signs of protectionism.”

"It’s a pity that they missed the chance to raise a strong voice against protectionism," said Le Dang Doanh, an economist and former Vietnam government adviser. "APEC countries need to show their role in pushing for free trade with further cooperation.”

Russia’s Economy Minister Maxim Oreshkin said in an interview on Saturday there was one country at the talks opposed to a strong commitment to fighting protectionism. When asked who that was, he replied: “You guess.”

“When there were talks about the memorandum of the forum, there were 20 countries that agree on everything and one country that has not agreed on anything,” he said.

Fair, Reciprocal

G-7 finance chiefs signed up this month to a pared-down pledge on global trade. The governments at a meeting in Italy said in a statement they are “working to strengthen the contribution of trade to our economies” -- a repetition of the language used at the G-20 gathering in March that fell short of an explicit promise to avoid protectionism.

U.S. Treasury Secretary Steven Mnuchin refused then to sign up to a well-established shunning of protectionism, and pressed for trade to be “fair” and “reciprocal.”

“They claim that U.S. policy is free trade but what they say they want is what they call fair trade,” said He Weiwen, a former Chinese trade diplomat in San Francisco and New York. “Really though the only purpose of the U.S. is to protect industries from unfair competition.”

“They haven’t explained what fair trade really is and are just claiming that it is something different,” said He, now a senior fellow at the Beijing-based Center for China and Globalization(CCG). “This is certainly not workable. It won’t help APEC, the G-20 or the whole course of the global economy. It is a pretext for protectionism.”

Canada’s Trade Minister Francois-Philippe Champagne said the focus should be on actions rather than statements.

“Actions are that economies have agreed to maintain rules-based open and free trade,” he said on Sunday in an interview. “I think we have to look at the big picture, which is the economies represented here have expressed a desire to continue to strengthen the system that exists in the Asia-Pacific."

New Zealand Trade Minister Todd McClay said there was no harm in having robust discussions and added the debate had been a “respectful one.”

“Ultimately we shouldn’t become overly concerned where we can’t reach agreement on a statement clearly and quickly at every single meeting,” he said in an interview on Sunday. “What you would be concerned about is when countries are not willing to come back and keep talking to each other.”

“Without question the U.S. administration has indicated they have different views around what fairness in trade means in as far as people meeting their obligations through agreements around trade disputes and so on,” McClay added. “Actually from what I have seen I have a lot of sympathy for the view that seems to be forming in the U.S.”(By Nguyen Dieu Tu Uyen and Luu Van Dat)

From Bloomberg,2017-05-23
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