LIMA – A summit of top world leaders was urged Friday to fight rising protectionism after Donald Trump’s election victory stoked fears that free trade and the global economy are under threat.
Trump, who triumphed in the Nov. 8 U.S. presidential vote, tapped the anger of working-class voters who feel left behind by years of globalization, vowing to protect American jobs against cheap labor in countries like China and Mexico.
As the summit of the 21-member Asia-Pacific Economic Cooperation (APEC) group got underway, host President Pedro Pablo Kuczynski of Peru urged the region’s leaders to robustly defend free trade, while the U.S. sought to reassure worried allies.
“In the U.S. and Britain, protectionist tendencies are taking over,” Kuczynski told APEC leaders. “It is fundamental that world trade grow again and that protectionism be defeated.”
Trump’s victory came after Britain’s surprise Brexit vote in June to leave the European Union, adding to deep uncertainty about the postwar world order and the future of free trade.
The sentiment also exists on a far smaller scale in Peru, where several dozen protesters — including Amazon natives in indigenous headdresses — gathered Friday in Lima to condemn free trade agreements and the “capitalist beast.”
Trump has notably vowed to scuttle U.S. President Barack Obama’s key trade initiative in the Asia-Pacific, the Trans-Pacific Partnership (TPP), leaving a vacuum that China — which was excluded from the deal — is keen to fill.
A delegate at ministerial meetings held on Thursday and Friday said APEC ministers had expressed concern over growing protectionism in the United States.
Japanese Minister of Economy, Trade and Industry Hiroshige Seko told reporters the APEC ministers “shared a sense of crisis” in the rise of protectionism.
Seko said he told APEC counterparts that Japan’s ruling coalition is making utmost efforts to get the Diet to approve the TPP during the extraordinary session set to end Nov. 30.
He urged other TPP members, including the United States, to advance domestic procedures such as ratification by legislatures so as to implement the deal at an early date.
U.S. Trade Representative Michael Froman sought to reassure leaders that U.S. policy would not change radically from one administration to the next. He urged those fearing the worst to give Trump time.
“It’s only been 10 days since the election,” he said. “Any new administration needs time to go through the transition process.”
Citing a recent study suggesting failure to ratify TPP would cost the U.S. around $94 billion in the first year alone, he said Trump had major incentives to see the deal through in some form. “Inaction poses serious costs,” he said.
On the sidelines of the APEC talks, ministers from the 12 TPP member states met Friday and exchanged information about their domestic processes to approve the pact.
“It’s not immediately known what a Trump administration will do about the TPP,” said Hiroshi Oe, Japan’s chief negotiator for the TPP. “But some members said it would be such a loss if the TPP never came into force.”
Trump is not at the summit, but he looms large over the meeting of APEC, a free trade club founded in 1989 that represents nearly 40 percent of the world’s population and nearly 60 percent of the global economy.
In a clear jab at the billionaire mogul’s anti-trade stance, Kuczynski said, “Anyone who wants to promote protectionism (should) read an economic history of the 1930s.”
The center-right economist urged his fellow leaders to deliver an “unequivocal message” in support of free trade.
The U.S. election has left China, a country the United States once considered a threat to free-market capitalism, as the unlikely leader of the movement for open trade.
Chinese President Xi Jinping is holding a strong hand as he meets Obama and other APEC leaders this week.
“There is no doubt that if the TPP fails, it will be a huge win for China, politically and economically,” said Brian Jackson, a China economist at consultancy IHS Global Insight.
Even longtime U.S. allies in the Asia-Pacific region now say they are keen to get on board with Chinese-backed alternatives to TPP.
Beijing is pushing an APEC-wide Free Trade Area of the Asia-Pacific (FTAAP) and a 16-member Regional Comprehensive Economic Partnership (RCEP), which includes India but not the United States.
World business leaders gathered on the sidelines of the summit bemoaned TPP’s “grim prospects” and urged governments to pour resources into FTAAP and set a concrete timeline, said Sun Xiao, an official with the China Chamber of International Commerce.
And amid mounting criticism that globalization has benefitted only the wealthiest, IMF chief Christine Lagarde defended trade as a major engine of growth. “We hope it continues to be — but it has to be inclusive growth,” she said.