With TPP Dead, China Officially Launches Its Own Pacific Free-Trade Deal

Tyler Durden's picture

As we noted on Thursday, "it was ludicrous for Obama to leave China out of things. China is the second biggest economy in the world, third if you treat the EU as a block. Had China been in the deal all along, we may not have seen the ludicrous provision that allowed companies to sue governments. That provision was one of the key reasons the deal failed. With the election of Trump, TPP is officially dead. China, not the US, will be at the center of a new Asian trade pact."

Furthermore, as Mish Shedlock pointed out, on November 10, in the wake of Trump’s election, Beijing quickly sought to fill the void left by TPP by reviving its proposed Free Trade Area of the Asia-Pacific pact.

"Xi Jinping is rekindling efforts to promote a rival to the US-led Trans-Pacific Partnership trade agreement in the wake of Donald Trump’s election victory, Chinese officials said on Thursday. With Mr Xi set to travel to Peru this month for the annual Asia-Pacific Economic Co-operation summit, Li Baodong, vice-foreign minister, said China’s plan could fill the void. Chinese officials have previously sought to promote the proposal at Apec, only to encounter resistance from US officials who wanted to prioritise TPP negotiations.

 

“Protectionism is rearing its head and the Asia-Pacific region faces insufficient growth momentum,” Mr Li said at a briefing on China’s plans for Apec, which starts next weekend. “China believes we should set a new plan to respond to the expectations of industry and sustain momentum for the early establishment of a free trade area.”

US officials have warned for months that the failure of the TPP would open the door to China to promote its own trade agreements, and that's exactly what happened today when at the meeting of Asia-Pacific Economic Cooperation (APEC) member states in Lima, Peru, Chinese President Xi Jinping officially called for the launch of the Free Trade Area of Asia-Pacific for "institutional guarantee of open economy."

From Xi’s point of view the free trade area will be an institutional guarantee for opening economies of the APEC countries, the Xinhua news agency reported. The president said that the Asia Pacific region should play a leading role and seek new paths for global growth. He also said that China was going to expand foreign investment access to its market and to offer more capital, products and business opportunities for other nations.

Xi noted that China was going to absorb $600 billion investments and to invest $750 billion in next five years. He expects Chinese import volume to reach $8 trillion in five years.

The Chinese leader pointed out that Chinese economy was steadily growing contributing more than 25 percent to the world economic growth in recent years despite difficulties and challenges it faced.

China's president said the  Asia-Pacific region must play leading role and find new path for global growth:

Peru has been hosting APEC's all-year-round meetings that culminating with the economic leaders' summit in Lima on November 19-20. The APEC leaders are expected to work out a strategic vision and guidelines for economic cooperation in the Asia-Pacific region for 2017, which will be laid down in the Lima declaration.

While the US will not be among the signatories, we are curious which pro-US, Asia-Pac countries will, and by doing so telegraph a shift in their "allegiance" from a US-centered trade  world, to one in which China is the dominant sovereign.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
billhilly's picture

Dead TPP = Good !!!!

ANY trade deal that needs to be done with such secrecy, especially by Governments, has got to be harmful to the masses. 

DRAIN THE SWAMP !!!!

Nemontel's picture

We are working on it! Trump has already banned all lobbyists from his team! This is a good first step!

http://www.truthjustice.net/politics/fash-the-nation-week-66-shoah-the-n...

bornlastnight's picture

Eric who?  Is he the lead nigger singer in "Hamilton" that excoriated VP Pence?

philipat's picture

Notably, the Chinese version will truly be about free trade and will not require members to surrender their sovereignty and legal system to the US Multi-national Corporations.

ZD1's picture

Notably, member nations will only be required to surrender their sovereignty to the Chinese Communist Party and their dictates.

It will end up being free trade for China and not so free trade for the sucker countries who buy into China's trade deal.

CheapBastard's picture

How do you spell failure?

O-B-A-M-A!

Dindu Nuffins's picture

Historically, here on ZH, China-lovers have been part of the fauna.

They actually think a fascist one-party state is a beacon of freedom. Most of these cretins got reduced to financial rubble when they went all-in during the buffoonish Chinese stock-market frenzy that the Chinese government inflated and popped with hilarious heavy-handed clumsiness. They've been quieter since.

any_mouse's picture

Been lurking here a long while and never noticed a bias either way about China. Well, there has always been skepticism about the numbers generated by the Party, but that also holds true for statistics from the USSA.

Dindu Nuffins's picture

The articles at Zerohedge have been very balanced, but the commenters in the comment section were extremely pro-China for a long time. I wish I could remember the names, but this comment section definitely had Yellow Fever up until the authoritarian stock-market shenanigans.

silvermail's picture

...a fascist one-party state is a USA.

Because the real power in USA belongs to only one party. This party is called the "party of big capital."
Everything else - this is only the performances, props and scenery for the crowd.

TRM's picture

You and me seem to be the only curious ones here. I'm willing to bet that he is waiting for after Trump and his AG are in office to "cut a deal" and resurface. Let's check back in the last week of January.

billhilly's picture

Next up...

DEATH to Obamacare !

Follow this by DEATH to income taxes !

Save the best for last.....DEATH to the FEDERAL RESERVE !!!!

Raffie's picture

CHINA FREE TRADE is wut they mean.....

Kagemusho's picture

Hmmm. It brings to mind something else. I believe it was called "The Greater East- Asian Co-Prosperity Sphere". That didn't turn out to well for many of its ultimately involuntary participants.

Coldfire's picture

Yes, history rhymes. The Japanese and TPP schemes were not free trade, but managed trade, i.e., fascism. Real free trade simply means not charging tariffs on each other. Charging tariffs is doing to yourself in a time of peace what an enemy does to you in a time of war. Of course free trade implies free movement of labour and capital as well as their products. https://en.m.wikipedia.org/wiki/Greater_East_Asia_Co-Prosperity_Sphere

Safelyundergroundlul's picture

TPP pushed to to the "long term". Not dead. To be more precise. 

roadhazard's picture

Yes, China needs to get rid of tons of toxic sheet rock and bad baby formula.

Atomizer's picture

Don't forget the 2005 Chinese drywall that fucked up Florida housing market under Greenspan Federal Reserve sockpuppet. 

bornlastnight's picture

"China is the second biggest economy in the world, third if you treat the EU as a block."

 

Wait until President Trump deals with China and it's money manipulation...I would suggest after 2019, China will be just another third world economy behinc Taiwan and India.  China will be put in it's place once President Trump levels the international trading field...GUARANTEED!

 

HEDGE ACCORDINGLY.

johnwburns's picture

Wouldn't go that far but it'd be nice to see them once again be world leaders in cabbage patch kids and snuggies.

johnwburns's picture

This could be a huge hit. Word is that Tonga and New Guinea are already expressing interest. They could own the plantain market. 

Atomizer's picture

My wife is Chinese, the family moved to Phillipines. They hate communism. Xi Jinping, go fuck yourself. My wife can tell you the message in 4 different languages. 

We are capitalist. Her Mother and Father bolted out of red China for a reason. Don't bring your shit to United States. It won't end well. ;p

Do you understand scumbag?

Mass_hysteria's picture
Mass_hysteria (not verified) Nov 19, 2016 7:08 PM

You don't know if the TPP is dead. Stop making such outrageous claims.

 

Who said it was dead? Do you Trust obama?

 

Just more confirmation that people are absolutely fucking blind and retarded. 

Ride the waves sheep! keep riding the wave, don't look behind the curtain! Trump appointing neocons to his cabin, BUT THAT'S NOT A REALITY!!! IT'S FAKE!! It's ok now!!! The neocons are good people now!!!

Atomizer's picture

It's dead. Wake up and smell the TPP flames burning from the secret document viewing room. 

Oberst-Gruppenfuhrer's picture

China talking about protectionism is akin to a Kardashian talking about abstinence from sex. China, as every business from a foreign country has to be a joint-venture. China, with every import getting tariffs imposed. China, with no regard to intellectual property rights. HAHAHA! Trump has heard the voices of the forgotten...the men left hung out to dry and destroyed by Billary Clinton and NAFTA, and China's entry into the WTO. Sorry China, our jobs and factories are coming back. MAGA bitchez!

Atomizer's picture

1995 Agreement regarding Intellectual Property Rights between China and the United ... - TU Law Digital Commons

 

Zuckerberg is more concerned about fake news, however he cannot answer his own issues of fake advertising figures. 2+2=5 in placing advertising results in Fuckbook. 

Nobodys Home's picture

Sounds like our old friends that own the central banks are up to their old hijinks to me. They took their toys from the US to go play with China.

Coldfire's picture

Speaking of modern China, is David Rockefeller dead yet?

Nobodys Home's picture

Nah. He's using blood plasma from children and teenagers to extend his life.

nailgunner44's picture

He's one ugly inbred jew! British my ass, that guy is one of the most disgusting motherfuckers on the planet.

kiwigal's picture

Unfortunately it is a global economy and China produces the world's goods, cheaply, efficiently.  All the hand wringing in the world wont turn back the tide. Would consumers be prepared to save a weeks salary to buy a coat or shoes? That is the way it use to be in many western countries before cheap offshore labour was used. Morally wrong for sure but the reality is people wont give up their cheap goodies in order to bring work back to western countries on a minimum hourly wage which is probably a days pay in many counties.

TRM's picture

One word for you .... Robotics.

China and India will not mass deploy robots because they will have a violent unemployment problem. The west can and will deploy them. I don't care how little you pay a worker in China and India but they can't compete with a robot. Nobody can.

So who will be the first to figure out how to integrate robots into their economy without massive unemployment (especially at the low end)?

kiwigal's picture

One of the suggestions that has been put forward in this scenario is a universal wage. How that could work,who would pay for it I havent read anything on that. Perhaps that would require a completely different form of economic theory. If you can imagine a workforce that was predominantly robotic that would suggest that birth control would have to be compulsory, it all sounds very science fiction like. Cloud Atlas!

sinbad2's picture

OK, so how does giving the job to a robot help with US unemployment?

Mr. Pain's picture

Close down Walmart that sells all that cheap plasic shit to the fucking stupid Amerikans that shop in that goddamned GLORY HOLE.

whatamaroon's picture

OT, but it seems India's conversion to smaller bills has turned toxic, as 55 have died waiting in line;

 

https://sputniknews.com/asia/201611201047632775-india-people-die-queues/

East Indian's picture

It will take months. if not years for a full recovery.

reader2010's picture

The TPP is a security pact in trade skin. Now you need to figure it out what will replace that.

ableman28's picture

The long term trend away from being a manufacturing nation started in the mid 1970's.

There is simply nothing that can be done in the short run to force manufacturing back to the US.  Even a 50% tariff on all imported goods wouldn't do it.

Factories have been idle for so long and couldn't easily be put back into service. Factories built around the newest manufacturing technoogies would take an enormous amount of debt financing and require years to complete and bring on line. Worker skills sets have long atrophied and it would take a decade to rebuild a sufficient supply of labor trained in the newest product manufacturing processes.

The supply chains to bring in the raw materials and distribute them no longer exist in the US at anything like the scale necessary to rebuild quickly.

In order to bring manufacturing jobs back to America consumers would have to tolerate an extended period of much higher prices, scarcity, and for awhile lower quality.  Good luck with that.

How things are now is how things are going to be unless, somehow, a 10-20 year period of accepting less and having it cost more can be forced onto the public.

Thats just how it is.

Faeriedust's picture

Ever heard of the Manhatten Project?  The Manned Space Program?  The Human Genome Project? 

The fact is, America is a large enough economy to undertake vast investments and retoolings when they get their shit together and decide to do it -- by government direction and coordinated planning, rather than the ad hoc dabblings of diletante capitalists funded by "investors" interested in short-term gains.  This is why the U.S. military is the closest thing to a socialist organization in the Western world -- because it's the ONLY agency that has the unqualified support of a supermajority of political factions, not to mention an entrenched class of rentier-contractors who profit spectacularly thereby.

America can damned well rebuild itself as a virtually self-sufficient industrial nation, with full employment and an equitable distribution of wealth.  If it wants to.  If it chooses to act in the interests of the public as a whole rather than for the personal profit or pipe dreams of a few hundred billionaires. But it's unlikely to do so until the billionaires decide that it's their only option other than total personal destruction.  They'll probably try to hire another Smedley Butler first.

 

ableman28's picture

Possibly true but the most recent dominant trend line in the society is away from large scale goverment projects and central planning of the type necessary to retool. Laissez faire capitalism at the bottom end....very small business........and monopoly control at the large end....both driven, by quite different reasons, toward short term profit.......are never going to invest in business development strategies that benefit the public over themselves.  Its not quite the opposite, its just that when the two aren't aligned the public gets fucked.  Wealth and power are enshrined in US politics in a very public way now and it aint ever going back.  The big battle between rich and temporarily middle class and the expanding poor is over.  The rich won.

 

skunzie's picture

I haven't read the Chinese deal yet, but if it's like NAFTA, I say let them pass it unanimously.  China needs to experience it's own version of jobs being sucked out of its economy just like the USA has under NAFTA.  There are many other developing economies which could provide better quality goods at a lower price than China.

the.ghost.of.22wmr's picture
the.ghost.of.22wmr (not verified) Nov 19, 2016 7:42 PM

Fuck those red commie slave-laboring organ-harvesting Chinese.

Atomizer's picture

Obama is rehatching Operation Infinite Reach.

A few tweeks, no one will figure it out. 

any_mouse's picture

Operation Infinite Reach Around.

JustPastPeacefield's picture

Trump isn't opposed to free trade. He's opposed to any trade deal where average American workers get fucked up the ass. Big difference.