A U.S.-led trade pact that would cover about 40 percent of the global economy won’t be successful unless it includes China and India, Sri Lankan Prime Minister Ranil Wickremesinghe said.
Speaking in an interview in Singapore, Wickremesinghe also said he doubted the 12-nation Trans-Pacific Partnership would pass the U.S. Congress in a so-called lame-duck session after the November presidential election. That would raise the risk of the pact,opposed by both Donald Trump and Hillary Clinton, getting stuck in Congress.
Wickremesinghe said Sunday that even if TPP was ratified by all members — a list that includes Australia, Japan, Singapore and Vietnam — the deal faced failure in the long term unless China and India were involved. So far, neither country is.
“China is already developing its own systems of trading and bilateral assistance” such as the Asian Infrastructure Investment Bank, said Wickremesinghe, who noted that India was the growth engine for the world’s fastest-expanding region. “The hard fact is that any agreement in Asia must include India and China,” he said. “You can’t have it outside that, it’s not going to work.”
Sri Lanka, an $82 billion island economy that sits along one of the world’s busiest shipping routes, is a member of the AIIB. China is pushing the Regional Comprehensive Economic Partnership, a 16-country trade deal that aims to unify a market of more than 3 billion people and is seen as a counterweight to TPP. Chief negotiators on the RCEP, which includes India, are meeting in Jakarta on Monday and Tuesday.
The TPP has been a centerpiece of U.S. President Barack Obama’s economic and military rebalancing to Asia. The World Bank estimates the pact could raise gross domestic product by an average 1.1 percent in member countries by 2030.
The agreement goes beyond typical trade deals that mostly focus on reducing tariffs and highlights stricter safeguards for patents and a more level playing field for companies that compete with government-backed businesses.
Such rules would reduce the policy space for India and may force it to implement sweeping structural reforms, the nation’s trade minister, Nirmala Sitharaman, said in February. China has criticized the TPP as the economic component of a U.S. plan to contain it.
Sri Lanka has said previously it is looking at further steps to liberalize its economy that are needed to join the TPP.
Trump, the presumptive Republican presidential nominee, has rejected the TPP as a “rape” of America. “It’s a harsh word, but that’s what it is — rape of our country,” he said last month.
Democratic candidate Clinton, who supported the TPP as Obama’s secretary of state, has since said the final deal “doesn’t meet standards” because it won’t increase wages for middle-class Americans. ( Bloomberg)