Fight Against Protectionism

Leaders of 21 Asia-Pacific nations ended their annual summit late Sunday with a call to resist protectionism amid signs of increased free-trade skepticism, highlighted by the victory of Donald Trump in the US presidential election.

The Asia Pacific Economic Cooperation forum closed with a joint pledge to work toward a sweeping new free trade agreement that would include all 21 members as a path “sustainable, balanced and inclusive growth,” despite the political climate, news outlets reported.

“We reaffirm our commitment to keep our markets open and to fight against all forms of protectionism,” the leaders of the APEC nations said in a joint statement.

The APEC countries set an ambitious goal “to reduce aggregate energy intensity by 45% by 2035.” In an effort to lessen the harmful effect of fossil fuels on the environment, the leaders also agreed to double the share of renewable energy sources by 2030, while at the same time striving to cap “inefficient” subsidies allocated to fossil fuel companies.

 Rising Skepticism

Growing resistance to globalization and integration processes is giving rise to protectionism, the statement warned, arguing that this opposition is hampering global economic progress.

Leaders said that they might seek to modify the TPP deal to make it more appealing to the incoming president or seek to implement it without the US. But the statement issued at the close of the summit said the organization would also work toward adoption of a broader 21-nation pact favored by the Chinese government known as the Free Trade Area of the Asia Pacific.

The APEC statement also said the members would adhere to the carbon reduction goals set in Paris last year to address climate change, which they called a threat to food security.

APEC noted the “rising skepticism over trade” amid an uneven recovery since the financial crisis and said that the “the benefits of trade and open markets need to be communicated to the wider public more effectively, emphasizing how trade promotes innovation, employment and higher living standards”.

The leaders also highlighted the perils of corruption, urging countries to implement “critical anti-corruption actions” in order to combat bribery, especially amongst local and foreign public officials.

 Trade Liberalization

Asia Pacific leaders should be careful about foreclosing their options on trade liberalization, Singapore Prime Minister Lee Hsien Loong said on Monday in response to widespread pessimism about the fate of TPP.

Observers have declared the ambitious trade pact, which accounts for about 40% of global output, “dead” following the recent electoral victory of Trump, who ran on an anti-trade platform.

Japanese Prime Minister Shinzo Abe said that free trade is a source of global economic growth and Tokyo intends to keep promoting the policy.

It is “not the right choice” to make exclusive regional trade arrangements as the Asia-Pacific region is facing the common challenge of protectionism amid slowing trade growth, President Xi Jinping said.

 Protectionism

Speaking to journalists at the conclusion of the summit, Peruvian President Pedro Pablo Kuczynski said the main obstacle to free trade agreements in Asia and around the world is the frustration felt by those left behind by globalization.

“Protectionism in reality is a reflection of tough economic conditions,” said Kuczynski, the meeting’s host.

Japanese Minister of Economy, Trade and Industry Hiroshige Seko told reporters the APEC ministers “shared a sense of crisis” in the rise of protectionism.

Seko said he told APEC counterparts that Japan’s ruling coalition is making utmost efforts to get the Diet to approve the TPP during the extraordinary session set to end Nov. 30.

US Trade Representative Michael Froman sought to reassure leaders that US policy would not change radically from one administration to the next. He urged those fearing the worst to give Trump time.

Citing a recent study suggesting failure to ratify TPP would cost the US around $94 billion in the first year alone, he said Trump had major incentives to see the deal through in some form. “Inaction poses serious costs,” he said.