Leaders of Pacific rim nations gathered in Peru on Friday seeking to salvage hopes for regional trade as prospects of a Donald Trump presidency in the United States sounded a possible death knell for the Trans-Pacific Partnership (TPP) free trade pact.
Discussions between the 21 members of the Asia-Pacific Economic Cooperation (APEC) summit are expected to be dominated by fears of rising anti-globalization sentiment in the West, where many worry about losing jobs to low-wage economies, and China's burgeoning role in global trade.
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"We have noticed that protectionist tendencies have begun to emerge," Peru's President Pedro Pablo Kuczynski said in an opening speech. "To anyone who wants to propose protectionism I suggest that you read the history books about the 1930s."
U.S. President Barack Obama, Chinese President Xi Jinping, and Russian President Vladimir Putin are due to attend the summit that brings together leaders whose economies represent 57 percent of global gross domestic product.
While campaigning for the presidential election which he won, Trump labeled the TPP "a disaster" and called for curbs on immigration. His isolationist stance echoed sentiments in Britain, which voted in June to quit the European Union.
Though Obama championed the TPP, his administration has now stopped trying to win congressional approval for the deal that was signed by 12 economies in the Americas and Asia-Pacific, but excluded China. Without U.S. approval the agreement as currently negotiated cannot come to fruition.
But Alan Bollard, the APEC secretariat's executive director, said it was premature to write the TPP off, though he expected it to be "put on the shelf" temporarily.
"I think at the minute they will sit on it and wait and see what the new U.S. administration looks like after a year or a couple of years," Bollard said.
China's Xi is expected to sell an alternate vision for regional trade by promoting the Beijing-backed Regional Comprehensive Economic Partnership (RCEP), which as it stands excludes the Americas.
The Kremlin said Obama and Putin would likely speak at the Lima summit, while a source said the leaders of Canada and Mexico would discuss the potential impact a Trump presidency could have on the NAFTA trade pact.
OPEN TO OPTIONS
In contrast with creeping protectionism in the U.S. and Europe, summit host Peru is one of the world's most open economies. It has already said it would like to join the Beijing-backed trade pact.
Others like Japan have expressed interest in moving forward with some sort of regional trade pact without the United States, Vice President Mercedes Araoz said.
"We probably will have several paths we could take, always with the commitment of having a free trade agreement in the Asia-Pacific region," Araoz told journalists.
Australia's Trade Minister Steve Ciobo said he hoped negotiations on TPP would continue, but in the meantime believed the Chinese-led agreement presented a big opportunity.
"If we are able to successfully land it over the coming months or the year ahead it would create again a terrific opportunity for Australian businesses to export through a common set of rules across the region," he told Australian Broadcasting Corp radio.
Business leaders, also gathered in Lima, cautioned that the world would need to wait and see what happened with a Trump presidency and Brexit but that customers accustomed to enjoying the fruits of free trade were unlikely to support the effects of increased barriers.
"The fact is that moms in Minnesota are still going to want blueberries in January, that your average consumer in England is still going to want the full assortment of products that they've been used to, and I have confidence that it will work out in a way that is practical and pragmatic," said Scott Price, Chief Administrative Officer of Wal-Mart International.
(Reporting by Rosalba O'Brien, Teresa Cespedes, Caroline Stauffer, Ursula Scollo and Mitra Taj in Lima, Additional reporting by Jamie Freed in Sydney; Writing by Caroline Stauffer and Rosalba O'Brien; Editing by Meredith Mazzilli and Alistair Bell)