Obama’s TPP push to counter china
HONOLULU, Hawaii : US President Barack Obama's bid to create the world's largest free trade zone spanning the Pacific gained momentum as Canada and Mexico followed Japan into accession talks.
At a regional summit in his native Hawaii, Obama said harnessing the huge trade potential of the dynamic region was vital as he wooed countries from across the Pacific Rim into the US-led Trans-Pacific Partnership (TPP).
"Today we have got a chance to make progress towards our ultimate goal which is a seamless regional economy," Obama told the Asia-Pacific Economic Cooperation (APEC) forum, which accounts for more than half the world's GDP.
"I want to emphasize that the Asia-Pacific region is absolutely critical to America's economic growth.
"We consider it a top priority. And we consider it a top priority because we're not going to be able to put our folks back to work and grow our economy and expand opportunity unless the Asia-Pacific region is also successful."
In another key priority for Obama, APEC -- which has 21 members including China, Japan and Russia -- pledged to remove barriers to green trade by limiting tariffs on environmental goods to five percent by the end of 2015.
Despite protests by China that the US agenda was overly ambitious, APEC members also made a non-binding promise to cut energy intensity -- the power used compared with the economy -- by 45 percent by 2035.
The Trans-Pacific Partnership was once an obscure pact among four APEC members -- Brunei, Chile, New Zealand and Singapore. But Obama transformed it into the cornerstone of a US free trade drive with Australia, Malaysia, Peru, the United States and Vietnam now also in the talks.
Japan, the world's third-largest economy, committed to joining the negotiations on the eve of the summit. Mexico and Canada followed suit on Sunday with Canadian Prime Minister Stephen Harper telling reporters: "We are expressing our formal intention to join the Trans-Pacific Partnership."
The TPP, whose 12 interested parties account for almost 40 percent of the global economy and some 800 million consumers, would strike down tariffs and trade barriers and inject momentum to liberalization hopes bogged down by inconclusive talks on the Doha round.
The notable absentee is China, the world's second largest economy, and tensions over economic policy threatened to boil over as Obama and Chinese President Hu Jintao held talks in Hawaii on the sidelines of APEC.
The United States has not explicitly ruled out China's entrance into the TPP, but Secretary of State Hillary Clinton has linked the "21st century" trade agreement to fundamental values including openness and labor standards.
Obama, seeking re-election next year as many heartland Americans think they lost their jobs to lower-wage China, told Hu on Saturday that Americans were "impatient" for a change in Beijing's economic policy.
Washington says that China keeps its yuan currency artificially low to boost its exports and complains that Beijing is lax on intellectual property standards, penalizing US innovation.
Despite swirling optimism about the TPP, Obama has acknowledged major obstacles must be overcome before a deal can be reached. Experts are skeptical that a US timeframe for a concrete pact in 2012 is realistic.
Some farm groups in Japan and the United States have voiced alarm that they would be swamped by global competition.