Countries should strike up more economic alliances than security and defense ones, as those could make the world “more dangerous,” the president of the Center for China and Globalization said on Tuesday.
Doing that would also circumvent a slide toward deglobalization, which could hold back economic development across the world. The U.S. for example, could consider joining — or “re-joining” — the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Henry Wang said at the SALT iConnections conference in Singapore.
“The U.S. is the vibe of globalization and [has] always taken the lead on globalization,” Wang said.
“It was a pity to see the U.S. pulling out of the [Trans-Pacific Partnership, which] … set higher standards for global trade, including the digital economy, and also the liberalization of trade and facilitation of investments.”
Wang added that there should be more economic alliances and fewer security ones such as the AUKUS, Five Eyes and the Quadrilateral Security Dialogue, an informal strategic alliance.
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership is a multilateral trade deal signed in 2018 that was formed after the United States, under the Trump administration, withdrew from the Trans-Pacific Partnership.
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“I hope that the U.S. now has settled this midterm, we can get towards economic, global alliances rather than have a lot of security, military, defense alliances which will make us more and more dangerous,” Wang said.
The CPTPP was formerly known as the TPP, which was part of the United States’ economic and strategic pivot to Asia.
Former U.S. President Donald Trump pulled the U.S. out of the trade pact in 2017, after it drew criticism from the protectionist end of the U.S. political spectrum.
The TPP has since evolved into the CPTPP after other members of the pact forged on with it. It is now one of the biggest trade blocs in the world, attracting applicants such as China.
The U.S. has not indicated any desire to rejoin the CPTPP. Instead, it launched its own separate non-trade relationship network with Asia-Pacific, the Indo-Pacific Economic Framework.
Echoing Wang’s point, Nicolas Aguzin, CEO of the Hong Kong stock exchange HKEX, said on the same panel that the globalization of trade has created many benefits, including bringing the East and West closer to each other.
“I mean, it had kept prices very low around the world in a lot of areas; we had productivity,” he said, adding that he doubts deglobalization would become a reality, in light of the complex interconnectedness of global supply chains.
With new powers emerging, tensions are bound to arise at this juncture of globalization, Aguzin said.
“Asia, as a region, over the next 10 years, we represent about half of the output of the world. I mean you’re going to have some rocky moments, because it’s a big shift. There’s a big shift of power and influence from West to East,” he said.
Economic alliances and healthy “Olympic-style” competition between the U.S. and China would therefore be better than confrontation, Wang added.
Wang said notes from the Chinese Communist Party meeting in Beijing indicate that Chinese policymakers are keen on “opening up,” which suggests Beijing still has appetite to promote trade and multilateralism.
The appointment of new Cabinet members from developed areas in China, such as Guangdong and Jiangsu, suggests Beijing has its eyes on more development, private businesses and investments from multinational companies, according to Wang.
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