As Chinese President Xi Jinping is visiting Switzerland for an annual meeting of the World Economic Forum, the China-backed Free Trade Area of the Asia-Pacific (FTAAP) is in the limelight amid rising protectionism in the region and a gloomy forecast of global trade in 2017.[Special coverage]
A manifestation of China's steadfast effort to promote globalization, the FTAAP has been envisioned as a major instrument for realizing Asia-Pacific economic integration and is expected to serve as a role model for globalization by injecting vitality into the world economy and rekindling enthusiasm for free trade.
The new trade bloc has been gaining steam especially after a collective study on the FTAAP was approved at the 2016 Asia-Pacific Economic Cooperation (APEC) Summit in Lima, the first substantial step toward its eventual realization.
NEED FOR FTAAP
2016 was a tough year for global trade and economy.
The World Trade Organization (WTO) has cut its projection for global trade growth from 2.8 percent to 1.7 percent in 2016 and revised down the forecast for 2017 to between 1.8 percent to 3.1 percent, from previously anticipated 3.6 percent. Similarly, overall global output growth is on a weakening trend.
"With expected global GDP growth of 2.2 percent in 2016, this year would mark the slowest pace of trade and output growth since the financial crisis of 2009," the trade bloc said in a press release in September.
Meanwhile, the election of Donald Trump as U.S. president, who advocates the protection of the U.S. economy and vowed to scrap the Trans-Pacific Partnership (TPP) -- a trade agreement proposed by U.S. President Barack Obama -- on his first day in office, signifies that the ideology of de-globalization is gaining ground.
While the United States may not be a key player in propelling free trade, countries in the Asia-Pacific still hold high expectations for free trade and economic integration, Dr. Oh Ei Sun, senior fellow with S. Rajaratnam School of International Studies at Singapore's Nanyang Technological University, told Xinhua.
"The responsibility to promote free trade in the region naturally falls on China, the second largest economy in the world," he said. "As the Asia-Pacific region is the world's busiest area on trade and economy, I think China's initiative (to build the FTAAP) will give certain enlightenment for countries in Europe, Africa or even the United States."
The FTAAP process was launched at the 2014 APEC Summit in Beijing with the endorsement of a roadmap. A collective strategic study was conducted subsequently and the result was approved at the APEC meeting in Lima.
By encompassing all 21 APEC economies through trade liberalization, the FTAAP, once established, will become the world's largest free trade zone, covering 57 percent of the global economy and nearly half of world trade.
It has been hailed as "a strategic initiative critical for the long-term prosperity of the Asia-Pacific" by President Xi, who also called for a firm pursuit of the trade arrangement as an institutional mechanism for ensuring an open economy in the Asia-Pacific.
"We need to actively guide globalization, promote equity and justice, and make globalization more resilient, inclusive and sustainable, so that people will get a fair share of its benefits and will see that they have a stake in it," Xi said while delivering a speech at the APEC CEO summit in Lima.
