American companies see the Chinese initiative of the Regional Comprehensive Economic Partnership (RCEP) as a real alternative to the Trans-Pacific Partnership (TPP) led by the United States.
David Abney, head of United Parcel Service (UPS), said that the US runs the risk of missing out on setting the terms for international trade by not approving the TPP.
Abney also said that his company will lobby members of US Congress to approve the deal.
“We think there’s a sense of urgency there,” Abney told Reuters.
He also referred to the negotiations China is holding with 15 countries to work out an alternative trade deal. On August 10-19, the 14th round of the talks are underway in Ho Chi Minh City, Vietnam. The negotiations involve China, the ten ASEAN country members, Australia, India, Japan, South Korea and New Zealand.
The next round is scheduled for October 16-22 in Tianjin, China. According to the Chinese news agency Xinhua, the participants are determined to reach a mutually beneficial and commercially important agreement.
“If that goes through, that would be China setting the rules for trade in that part of the world,” Abney added.
Meanwhile, currently even close allies doubt that the US will determine the rules of the global trade. The role of the global trade leader will soon be vacant, said Alexander Salitsky, an expert at the Institute of Global Economy and International Relations, Russian Academy of Sciences.
However, China does not want to be a trade hegemon and would like to assume the leading role, he said.
“Chinese capital does not fit in the domestic market anymore. There are major state-owned companies in China, but private companies are also getting strong. Chinese private capital is now crossing the borders. More actively than American capital,” Salitsky told Sputnik.
According to the expert, American capital is mostly financial and cannot provide appealing forms of partnership to other companies. At the same time, Chinese private companies are ready for expansion.
“China is ready to write the global trade rules. Moreover, Beijing can handle all current global trade tools, including within the World Trade Organizations. Many Chinese companies do not just copy. They have own intellectual property rights and defend them against American and South Korean firms. We’re witnessing the transition of global trade and financial leadership from the US to China,” the expert said.
US President Barack Obama hopes that the TTP will be one of the most important parts of its political legacy. However, neither Donald Trump nor Hillary Clinton are expected to approve the initiative.
The US mounted serious pressure on its partners to accelerate the deal last year. Now, the deal has stalled due to inter-party political tensions in Washington. Many analysts say this situation would finally affect the ratification of the deal by each of the participating countries, especially Japan, Australia, New Zealand and Chile. In fact, if approved the agreement would seriously reduce their economic and trade sovereignty.
At the same time, Beijing respects the rights and sovereignty of other countries, Salitsky underscored.
“China is an avid supporter of national sovereignty. This is why Beijing’s stance on the issue is appealing for other countries, especially those interested in the RCEP. Some South Asian countries are already competing to have exclusive trade ties with Beijing,” he said.
When Barack Obama said the US should define the rules of global trade many US allies in Asia and Latin America were not happy with this, the expert added.
“Currently, many Asian countries want to reduce US influence and boost national sovereignty. In this context, China is a better partner than the US. And this is very important for expanding Chinese influence,” Salitsky concluded. 17 August 2016
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