BEIJING – Amid the stalling of the proposed Trans-Pacific Partnership (TPP) agreement and expected challenges with the alternative Regional Comprehensive Economic Partnership (RCEP) deal, China has proposed a third route. Assistant Minister of Commerce Wang Shou confirmed China’s plan to urge Asia-Pacific Economic Cooperation (APEC) trade ministers to initiate a study on the feasibility of the proposed Free Trade Area of Asia Pacific (FTAAP) during the APEC Senior Officials’ Meeting to be held later this month in Qingdao. China is also due to host the annual APEC meeting this October in Beijing after last year’s Bali round.
As negotiations remain in gridlock for the United States-led TPP trade agreement, China’s proposed FTAAP could serve as a rival trade deal to spark investment and growth in the region. Assistant Minister Wang Shou, however, made clear during a press conference held in Beijing that there was no conflict between the TPP and FTAAP, which was first proposed in 2004.
The FTAAP received regional attention in both 2010 and 2013 when APEC leaders promoted the agreement as a comprehensive plan structured around existing regional trade agreements (RTAs) and bilateral free trade agreements (FTAs). The proposed pathways for establishing the FTAAP have included cooperation with the ASEAN Economic Community (AEC), the Pacific Alliance and even possible future TPP or RCEP integration.
Assistant Minister Wang Shou stated during his press conference that future FTAAP talks at the upcoming APEC Senior Officials’ Meeting in Qingdao this month would focus on the feasibility of establishing a working group to study the potential benefits of the FTAAP, but would not actually represent the initial stages of negotiation for the agreement. He further stressed the need for such a regional agreement, which would help businesses negotiate the multitude of tariffs and rules of origin that currently hamper cross border business.
Chris Devonshire-Ellis of Dezan Shira & Associates comments, “At the Euromoney ASEAN conference in Jakarta last month there was considerable talk about the possibilities of the TPP and RCEP deals merging together rather than remaining politically separate between Washington and Beijing. The proposed FTAAP deal may just be that route.”
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