China Eyes December Outcome for Asia Trade Deal

Beijing aims to see the conclusion of a 16-country Asia-Pacific trade deal by the end of this year, Chinese Commerce Minister Gao Hucheng said this past weekend, while watching closely the development of a separate Pacific Rim trade deal – the Trans-Pacific Partnership (TPP), which does not include China.

The commerce chief was speaking at a press conference on the sidelines of the National People’s Congress, the annual meeting of the Chinese parliamentary body and one of the most high-profile events on the Beijing political calendar.

The Regional Comprehensive Economic Partnership (RCEP), as the proposed 16-country deal is known, includes as members Australia, China, India, Japan, New Zealand, South Korea, and all ten members of the Association of Southeast Asian Nations (ASEAN).

The RCEP negotiation was formally launched in November 2012, with the goal of inking a “modern, comprehensive, high-quality, and mutually beneficial economic partnership,” according to a statement leaders issued in 2012 when announcing the talks.

Since then, negotiators have held seven official rounds, with the latest being held in Thailand in February. The group’s 16 members account for 28 percent of the global economy, and the deal – if completed – would be one of the largest existing trade pacts.

Regional trade deals

China plans to “continue to unswervingly push forward and quicken the pace of China’s free trade agreement strategy,” Gao told reporters this past weekend, according to comments reported by the Reuters news agency.

Along with working to conclude the RCEP, the Chinese official also said that Beijing hopes to ramp up separate trilateral trade talks with Seoul and Tokyo.

Those negotiations date back to May 2012, though these have since slowed in light of territorial disputes between China and Japan, among other political tensions.

South Korean Deputy Foreign Minister Lee Kyung Soo said this week that foreign ministers of the three Asian economic giants will be meeting this month in Seoul to discuss the possibility of a leaders’ summit – the first in three years.

Separately, China and South Korea initialed a bilateral trade deal of their own last month, with the two sides now preparing the deal for signature.

Other regional trade initiatives involving Beijing have also progressed in recent months, with China clinching a bilateral trade deal with Australia last November. The two sides are now undergoing the necessary “legal scrubbing” in order to open the deal for signature.

Eyes on TPP

The Chinese commerce official has said that his government is watching the TPP deal, as well as the ongoing Transatlantic Trade and Investment Partnership (TTIP) talks between the US and EU, closely to understand the potential impacts these could have on trade.

TPP negotiators are said to be trying to close as many gaps as possible during this week’s Hawaii meeting, ahead of a potential ministerial gathering that could follow shortly thereafter. Several members from TPP member countries, particularly the US, have said that they aim to reach a deal this year.

With 2015 now the target date for concluding both the TPP and RCEP, trade analysts have repeatedly questioned how the two trade deals will relate to one another, once finalised.

The two groups have significant overlap in their membership, with Australia, Brunei, Japan, Malaysia, New Zealand, Singapore, and Vietnam involved in both negotiations.

However, they also have notable omissions: the US is not an RCEP member, and China is not involved in the TPP talks.

Slower growth

Among the various other announcements at the high-level event was Chinese Premier Li Keqiang’s assertion that Beijing is reducing its economic growth target for 2015 to around seven percent, while targeting total trade growth at six percent for this year.

This “new normal,” analysts says, appears to acknowledge the recent slowing in growth seen in China, while trying to temper expectations. Last year, the country reached a level of 7.4 percent GDP growth, the lowest in decades, and just under the 7.5 percent target the government had aimed for.

This year’s approximately seven percent target, Li said, “takes into consideration what is needed and what is possible,” citing a range of difficulties that the Asian nation is facing, such as deflationary pressure and limited investment growth.