EuroWire January 2018

Transatlantic cable

other more onerous barriers than they would have if trade agreements that included America were in place.” The US Chamber of Commerce – which has clashed with the Trump administration on the North American Free Trade Agreement, TPP, and trade policy more generally – said it was heartened by the fact that Mr Trump’s Asia visit lasted nearly two weeks – the longest of any American president in more than a quarter of a century. † † But it was not lost on chamber officials that Mr Trump did not articulate any strategy for commercial engagement in the region. His consistent line is that the USA wants fair and reciprocal trade to reduce America’s large trade deficits with Asian countries, and that he prefers negotiating bilateral rather than multilateral deals. The trouble is, said Don Lee of the Los Angeles Times : “No other country is lining up to sit down and bargain with the US on trade.”

An inevitable after-effect of Washington’s abandonment of the sweeping Asia-Pacific trade deal is, of course, a renewed push by China to become the dominant player in the region. Malaysia and Singapore are also moving to act alone, after long association with USA interests and policy. And Mr Lee noted Japan’s move out of its traditionally passive role to exercise greater leadership on trade. It was Tokyo, he wrote, that took the lead in going forward on the TPP without the United States. Wendy Cutler, an Obama administration trade negotiator who worked on the TPP, told Mr Lee, “Everyone talks about a vacuum in leadership and everyone talks about China filling that vacuum. In this instance, it’s Japan filling that role.” That notable shift would not be happening if the United States were not changing course in Asia. As Robert Holleyman, a Washington attorney and former deputy US trade representative, put it to the LA Times : “You have these multiple paths to establishing the rules of trade and better integration of trade within Asia. And then you have the US, the outlier.” Mr Holleyman, who was in Vietnam ahead of the 10 th November Asia-Pacific Economic Cooperation summit in Da Nang, said he perceived a consistent theme among the APEC economies: Now that the US has left Asia, we need to step forward and do this on our own. † † The Times took note of the view of trade experts that an economically sidelined USA in Asia would almost certainly weaken American companies and hurt exports – as well as prospects for returns on the massive investment American firms have made throughout the region over the last 35 years. Mr Lee warned: “US firms may face higher duties and

Economies that are handily outpacing the developed world attest to a rebound for emerging Asia

President Trump may come to regret his scepticism on Asian alliances – and sooner rather than later. In its most recent report, the Baltimore, Maryland-based investment house T Rowe Price noted that, following Mr Trump’s election, emerging markets in Asia “faced an ominous outlook.” But an unexpected turnaround has prompted a reassessment. Given that the stock markets of developing Asia led the world last year, the outlook for the region now looks decidedly brighter.

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January 2018