Following a near two-week visit to Asia discussing bilateral trade relations with leaders of Vietnam, China and the Philippines, US President Donald Trump came away with no specific deliverables.
Markets have been left less than impressed that the US President received no trade concessions from either Asian power during his trip, particularly given that, at the same time, the 11 remaining members of the Trans-Pacific Partnership have advanced their effort to modify and implement that agreement.
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In Vietnam, Trump and the President of the Socialist Republic of Vietnam, Tran Dai Quang, discussed measures to “strengthen and expand” the comprehensive partnership between the two countries based on “mutual understanding, shared interests, and a common desire to promote peace, cooperation, prosperity, and security in the Indo-Pacific region”.
The two countries said they would work to “deepen and expand” their trade and investment relationship through formal mechanisms, including their trade and investment framework agreement. They also pledged to promote “free and fair” trade and investment in priority areas such as electronic payment services, automobiles, and intellectual property rights enforcement.
By contrast, a statement with China’s President, Xi Jinping, emphasised long-standing US complaints, with the two sides engaging in a “candid and constructive” exchange of views on regional security and maritime issues. There was no indication, however, of any agreement on joint efforts going forward.
President Trump underscored the importance of re-balancing the bilateral economic relationship with China, emphasising the need for a “more equitable” relationship that strengthens American jobs and exports. He also pressed Xi to reduce the trade deficit by eliminating barriers to trade, guaranteeing “fair and reciprocal” treatment to US companies and exports, and implementing market-oriented reforms.
Criticism was also levelled at the Chinese government for its intervention in the Chinese economy, which he said has caused “stresses” in the global trading system. He reiterated that the US will use “all available trade remedies to create a level playing field for United States workers and businesses”.
America’s trade deficit with China stood at US$347bn in 2016 and could rise to $370bn this year, according to Bloomberg.
The two leaders unveiled more than $250bn in economic deals, but it is understood the amount includes transactions that had already been concluded, and others that have escape clauses allowing the parties to exit deals.
In the Philippines, Trump welcomed the country’s interest in a bilateral free trade agreement and both sides agreed to discuss the matter further through the US– Philippines TIFA. They agreed to strengthen the trade relationship, including by continuing to make progress in the areas of market access related to agricultural products, intellectual property, customs and labour, among others.
President Trump withdrew the US from the TPP in January, raising questions about its future. Last week, however, ministers of the 11 remaining signatories moved forward with the trade pact, agreeing on core elements.
Ministers have suspended 20 provisions from the original agreement, if Washington stays out of the pact, 11 of which are related to intellectual property. And a revision of the original TPP text means the CPTPP can come into force 60 days after at least six signatories complete domestic procedures.
It is expected that, after each country has cleared the necessary domestic procedures, the agreement will take effect by 2019.
