The President in Asia: Is a Grand Bargain on the Agenda? | Global Trade Magazine
International Trade
  November 8th, 2017 | Written by

The President in Asia: Is a Grand Bargain on the Agenda?

Despite its Possible Appeal to Trump, It’s Unlikely, Say Experts

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  • The US can force change in the trade picture with China by hanging tough with allies.
  • US tariffs on Chinese aluminum foil can signal unhappiness, but it is not the basis for a strategy.
  • “Everyone is tired of China playing with under-inflated footballs.”

US President Donald Trump in the midst of his first trip to Asia as president. He is visiting China, Japan, South Korea, the Philippines, and Vietnam.

The president’s attitude toward Asia has left allies and adversaries alike uneasy. Trump withdrew the United States from the Trans-Pacific Partnership, a multilateral trade agreement with eleven other Asia-Pacific nations, on his first full business day as president. Just as the nuclear crisis with North Korea was ratcheting up, he instructed his advisers to pull the United States out of a free-trade pact with South Korea and he heated up the rhetoric against North Korean leader Kim Jong-un.

On the other hand, Trump has exhibited an eagerness to engage Asian leaders. Trump met Japanese Prime Minister Shinzo Abe even before he was inaugurated and has expressed eagerness to strike a bilateral trade deal with Japan even after withdrawing from the TPP. He hosted Chinese President Xi Jinping at his Mar-a-Lago resort in Florida. The president has also met South Korean President Moon Jae-in, Malaysian Prime Minister Najib Razak, Thai Prime Minister Prayut Chan o-cha, and Vietnamese Prime Minister Nguyen Xuan Thuc at the White House.

Strategic thinkers on Asia have been speculating about whether Trump will attempt a grand bargain with China, as well as South Korea, Japan, and Russia, over the issues that face the region: not only trade but also North Korea’s nuclear ambitions.

“The purpose of the grand bargain would be twofold,” according to Patricia Kim, a nuclear security expert at the Council on Foreign Relations. First would be to assure all parties “that joining Washington to pressure North Korea…will not sway the regional balance of power…” Second, Kim wrote, would be “to send a message to Pyongyang that it can no longer rely on the strategic gaps between its neighbors to continue its ‘byungjin’ policy of pursuing both nuclear weapons and economic development.”

“The time is ripe to strike a grand bargain,” Kim concluded, and Trump prides himself in his talent to strike deals.

But Elizabeth Economy, director of Asian studies at CFR, says those prospects have dimmed. “It now appears there will be no grand bargain—not on North Korea, not on trade, and not on the South China Sea,” she wrote. “A grand bargain should take time and thought, and the administration has not had much of either over the past ten months.

“This trip should focus on figuring out next steps in addressing the DRPK crisis,” Economy concluded.

Whether the Asian countries are able to agree on those remain to be seen, but smaller steps on trade appear unlikely on this trip, according to Robert Manning, a senior fellow at the Atlantic Council. Trump may push for a bilateral trade agreement between the two countries, but Japanese Prime Minister Shinzo Abe, who made TPP one hallmark of his policy, “is likely to politely decline,” wrote Manning.

“Abe is actively pursuing TPP minus the United States as well as a trade pact with the European Union,” he noted.

Japan might try to persuade Trump to return to the TPP after the 2018 mid-term elections, but that effort will likely be in vain. Trump has show no sign of any change in his views on trade.

According to Economy, the only way the US can force change in the trade picture with China is to hang touch with allies like Japan, Germany, the UK, South Korea, and Australia. “Selective US tariffs on Chinese goods such as aluminum foil can signal unhappiness, but they do not form the basis of a strategy.”

A strategic approach, in concert with its allies “will mean being prepared to develop a comprehensive, multilateral trade and investment strategy to address the uneven playing field,” Economy wrote. “Everyone is tired of China playing with under-inflated footballs.”


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