The biggest losers of FTA (Free Trade Agreement) deal

The biggest losers: Beijing and Hong Kong economy to suffer from Washington-led free-trade deal

TPP agreement could shave 2.2 per cent from the mainland's gross domestic product and threaten its position as the world's factory

PUBLISHED : Friday, 09 October, 2015, 11:51pm
UPDATED : Saturday, 10 October, 2015, 7:16pm

Denise Tsang
[email protected]



Chinese Commerce Minister Gao Hucheng.

Beijing and Hong Kong are grappling with the impact of a Washington-led free-trade agreement that could deal a blow to their respective economies and shave 2.2 per cent off the mainland's GDP, according to a Chinese economist.

People's Bank of China research bureau chief economist Ma Jun made the forecast in joint research published by the official Shanghai Securities News yesterday, a day after Commerce Minister Gao Hucheng said Beijing would "evaluate comprehensively" the impact of the Trans-Pacific Partnership (TPP) that excludes Beijing.



The Washington-led trade deal could shave 2.2 per cent off the mainland's GDP, according to a Chinese economist. Photo: Reuters

The mainland and Hong Kong emerged as two of the biggest losers of the deal, which covers about 40 per cent of the global economy and includes their top trade partners including the US, Japan, Vietnam and Australia.

Some economists said the deal, pending further discussion and approvals in the 12 member countries, threatens China's position as "the world's factory".

"All regional free-trade arrangements can cause some impact on the flow of trade and investment on non-members," Gao said.



After years of talks, the United States, Japan and the 10 other Pacfic Rim countries reached a broad agreement on the Trans-Pacific Partnership initiative, which covers around 40 percent of the global economy and excludes China. Photo: Kyodo

Dubbed "ABC" (Anyone but China), the trade deal is regarded as a US strategy to counter China's rising power in the region and has triggered fears that it will aggravate the downturn of China's exports and economy.

Ma's estimate of China's forgone gross domestic product is larger than some economists' forecast of a drop of 0.14-0.5 per cent. China expected its economy to grow by approximately 7 per cent this year compared to 7.4 per cent last year, the slowest since 1990.



US President Barack Obama meets agriculture and business leaders to discuss the benefits of the Trans-Pacific Partnership for American business and workers. Photo: EPA

TPP is seen as a higher-level free-trade agreement covering almost anything from investments, environment, labour and intellectual property to state-owned enterprises.

Mizuho economist Shen Jianguang said the mainland should counterbalance the TPP through the existing One Belt, One Road trade strategy and free-trade agreements, and press ahead with fiscal reforms to embrace global challenges.

A spokeswoman of Hong Kong's Trade and Industry Department said Hong Kong welcomed and supported regional initiatives in free trade.

"The TPP, in which many of our major trading partners are participating, is on our close watch," she said in a written reply to the Post. "We will study the TPP text when it is available."

Federation of Hong Kong Industries honorary chairman Stanley Lau Chin-ho said the deal might speed up the migration of Hong Kong factories from the mainland to TPP member countries such as Vietnam and Brunei.

"The trade deal is unfavourable to Hong Kong," he said. "But it's not the end of the world." Lau said the central government should improve the mainland's operating environment to lift its competiveness, which has been eroded by rising wages, more demanding labour rules and industrial reform.

Additional reporting by Wendy Wu

china constantly flout, circumvent and dishonor contracts and trade agreements including the wto framework that no other cuntry wants to sign fta's with them anymore. bunch of frauds and cheats.

eatshitndie said:

china constantly flout, circumvent and dishonor contracts and trade agreements including the wto framework that no other cuntry wants to sign fta's with them anymore. bunch of frauds and cheats.

Click to expand...

fuck u ah meng :oIo:

It's not really a trade deal... it's Big Uncle Sam gathering its 'coalition of the willing' client states against the BRICS nations, particularly China.

Li Ka Shing got out just in time... smart guy..

It is you.

China is the biggest trading partner of 153 countries in the world,they dont need any trade agreements.trade agreements are just there for the big to bully the small the strong to fuck the weak and sinkies are about to get fucked.

Its not all that bad for China,,,many countries still depend on China for trade and investment,,,and at most China lose those cheap labour industries that it wants to get rid off anyway,,

http://finance.yahoo.com/news/china...1YTVuBGNvbG8DZ3ExBHBvcwMzBHZ0aWQDBHNlYwNzcg--

China calm over TPP isolation as it pursues regional deals

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SEOUL (Reuters) - Left outside the U.S.-backed Trans-Pacific Partnership (TPP) trade pact struck last week, China and India approach this week's talks for a huge Asia-wide equivalent with fresh urgency, lest competitor nations steal a march on export access.
Beijing is a key driver of the Regional Comprehensive Economic Partnership (RCEP), a proposed 16-nation free-trade area that would be the world's biggest such bloc, encompassing 3.4 billion people.
"Member countries will be under pressure to fast-track negotiations for RCEP," said a senior official in India, which is keen to avoid being excluded from major trade accords.
While China's rivalries with India and Japan will complicate progress, it has incentive to get things moving.
China's central bank estimates the world's second-largest economy could forfeit a 2.2 percent boost to gross domestic product if Beijing does not join the TPP, according to a commentary by the bank's chief economist, Ma Jun, published in the official Shanghai Securities News on Friday.
China stands to lose ground to manufacturing competitors such as Vietnam, which as a TPP member will have greater duty-free access to the United States and other member nations, said Tu Xinquan, a professor at the University of International Business and Economics in Beijing.
"It's not that there is a competition between the RCEP and the TPP, but overall, because of the pressure put on by the TPP, there's hope for a faster end to negotiations for more liberalised trade in the region," Tu said.
RCEP was first conceived by the 10 members of the Association of Southeast Asian Nations (ASEAN), but China is increasingly prominent as backer of the proposed pact.
While RCEP has largely been seen as an alternative to U.S.-led trade plans, some say that view is evolving.



China may ultimately look to steer RCEP talks towards a broader pact that would encompass TPP into a Free Trade Area of the Asia-Pacific (FTAAP), said Kim Young-gui, head of regional trade studies at the Korea Institute for International Economic Policy in Seoul - an idea first put forward by the Asia-Pacific Economic Cooperations (APEC) grouping.
Seven countries - Australia, Japan, Malaysia, New Zealand, Singapore, Vietnam and Brunei - are in both TPP and RCEP.
"New Zealand views TPP and RCEP as complementary stepping stones to the vision of a Free Trade Area of the Asia Pacific," said a Ministry of Foreign Affairs and Trade spokesperson.
The TPP deal, reached on Oct. 5 after marathon talks between the United States and 11 Pacific Rim nations, aims to liberalise commerce in 40 percent of the world's economy and would be a legacy-defining victory for President Barack Obama.
RAISING STANDARDS?
Obama wants TPP to help boost U.S. influence in East Asia and counter the rise of China, but Beijing officially welcomed the pact, saying it hoped the deal would promote Asia-Pacific trade.
"We hope that regardless of whether it is the TPP or the RCEP, they both can supplement, promote and be beneficial to strengthening the multilateral trade system," said Chinese foreign ministry spokeswoman Hua Chunying.
Prime Minister Shinzo Abe of Japan, a key player in TPP, held out the prospect of bringing China into the deal in future, saying it would increase the pact's strategic significance and improve regional stability.
Washington does not dismiss the possibility, though China would need to undertake reforms to meet the standards of commerce envisioned by the TPP.
"It is not designed to encircle China," Deputy U.S. Secretary of State Antony Blinken said in Seoul last week when asked if Washington sees the TPP deal as a way to check China. "To the contrary, if China is interested in pursuing membership and it is able to meet the standards, we would welcome that."
Those standards include minimum labour rights and principles for currency management that RCEP is unlikely to demand of Beijing.
A Japanese foreign ministry official said TPP would accelerate the pace of RCEP and could have some impact on "raising the level of the outcome of the negotiations”, but the "very diverse group" had different ideas on what might be desirable.
The 16 RCEP countries will present their offers for market opening when they meet in Busan in South Korea on Monday, with an aim to make "best efforts" towards reaching agreement by year-end, a South Korean official close to the negotiations said.
Negotiators are expected to share their lists of offers for tariff reductions on goods and service sectors.
Song Yeong-kwan, a research fellow at the state-run Korea Development Institute, believes agreement nevertheless remains years away.
"Some countries have tensions with China, so it will not be easy, and the process could be a bumpy ride," Song said.
(Additional reporting by Sohee Kim and Hooyeon Kim in Seoul, Manoj Kumar in New Delhi, Megha Rajagopalan, Michael Martina and Adam Rose in Beijing, Charlotte Greenfied in Wellington and Linda Sieg in Tokyo; Editing by Tony Munroe and Will Waterman)