Malcolm Turnbull has defied Donald Trump by holding open the door for China’s entry into the Trans-Pacific Partnership, raising hopes of creating a new regional trading bloc in a challenge to the direction of the new US administration.
The Prime Minister held out the prospect of Beijing joining the Pacific-wide trading agreement only a day after Mr Trump signed an executive order formally withdrawing the US from the trade pact covering more than 40 per cent of global GDP.
“Certainly there is the potential for China to join the TPP,” Mr Turnbull said. “There is also the opportunity for the TPP to proceed without the United States.”
Mr Turnbull’s comments came as Japanese Prime Minister Shinzo Abe said he would continue advocating free trade and seek to convince Mr Trump of the importance of the TPP.
“I would like to seek President Trump’s understanding about the economic and strategic significance of the TPP,” said Mr Abe, who spoke to Mr Turnbull by phone on Monday to confirm the importance of the TPP.
UK interest in future of TPPUK interest in future of TPP
Mr Turnbull framed his ongoing promotion of the TPP as a defence of “Aussie jobs” and warned that rising protectionism was not a ladder to escape low growth but was instead a “shovel to dig it deeper”.
He used the issue to sharpen his attack on Bill Shorten, labelling him a “Down Under protectionist” for his refusal to stand up to Mr Trump and join the fight to salvage an agreement without US participation. “It’s shameful that Bill Shorten would throw in the towel. What a weakling,’’ he said.
“A statement in Washington and he gives up … He can go around in as many fluoro vests as he likes. He is a walking, talking threat to Australian jobs.”
Mr Turnbull’s opening to Beijing follows Chinese President Xi Jinping’s defence of free trade and economic globalisation in the face of Mr Trump’s return to protectionism in a speech last week to the World Economic Forum in Davos, Switzerland.
Former Liberal trade minister Andrew Robb, who negotiated the TPP for Australia, yesterday argued the biggest losers from Mr Trump’s decision to abandon the deal were the people of the US.
“In the long term, it’s a very dumb economic decision taken by the new President,” he said. “It would see more jobs, and high value jobs coming into the United States.”
Mr Turnbull yesterday revealed talks over the past week with Japan, Singapore and New Zealand had focused on trying to save the TPP as well as the need to maintain the momentum for free trade and open markets.
“There is a bigger proportion of Australians whose jobs depend on exports than there is of Americans. So trade is critical to us,” he said.
While Mr Abe said he would continue to persuade Mr Trump, a Japanese government spokesman said it would be “meaningless” to have the TPP without the US and that Tokyo was not considering revising the deal.
“Without the US, it would lose the fundamental balance of benefits,” Koichi Hagiuda said.
The TPP was conceived as a 12-nation Pacific-wide trade pact covering more than 40 per cent of global GDP and its member countries included the US, Canada, Australia, New Zealand, Japan, Chile, Malaysia, Mexico, Peru, Singapore, Vietnam and Brunei.
The Opposition Leader yesterday argued that Labor was not responsible for the death of the TPP, saying Mr Turnbull was living in “la-la land” for his ongoing advocacy for the deal despite Mr Trump’s strong opposition. “Malcolm Turnbull should be brave enough to criticise Donald Trump for what he is criticising me for, because it’s Donald Trump who has killed this trade agreement,” Mr Shorten said.
Trade Minister Steven Ciobo yesterday confirmed that Australia had already talked to a range of TPP signatories about the prospect of securing a “12 minus one” deal — an agreement without Washington.
A former deputy director of the World Trade Organisation, Andrew Stoler, yesterday backed Mr Turnbull’s plan to proceed with and possibly expand the TPP without US participation as a stepping stone to realising the bigger vision of a free-trade area in the Asia Pacific.
Mr Stoler, now an independent consultant, argued it would take only “a couple of days” for the remaining TPP member nations to renegotiate article 30.5 of the agreement — the clause which prevents it from entering into force without the participation of the US.
“The major benefit of the TPP would eventually be attracting China,” he told The Australian.
“The TPP really needs to have China and also Korea and Taiwan. It would be stupid to throw all those years of work down the toilet because Trump doesn’t do a sensible thing.”
Professor of International Law at the Australian National University Don Rothwell said renegotiation of the TPP to exclude the US would involve altering only one clause and would not involve putting all the trade-offs involved in reaching the deal back onto the table.