Xi Jinping warns of rival trade pact fragmentation

China’s President Xi Jinping Wednesday urged Asian economies to sign up to its free trade agreement, warning that rival pacts risked causing “fragmentation” among regional nations.

Both China and the United States are pushing their own free trade visions for the economically vibrant and populous region. Last month 12 Pacific nations finally reached an agreement on the US-led Trans-Pacific Partnership pact, a major diplomatic coup for Washington. China is pointedly excluded from the TPP, part of Washington’s attempt to ramp up influence in the region with its “pivot” to Asia.

Beijing has instead pushed its own agreement, the Free Trade Area of the Asia-Pacific (FTAAP) “With various new regional free trade arrangements cropping up there have been worries about the potential of fragmentation. We therefore need to accelerate the realisation of FTAAP and take regional economic integration forward,” Mr Xi said.

The Chinese leader gave his remarks to business leaders in Manila, hours before he is due to meet US President Barack Obama on stage at the regional Asia-Pacific Economic Cooperation (Apec) summit in the Philippine capital. As he spoke, leaders from the 12 TPP nations met and extolled the pact’s economic benefits, in an effort to smooth domestic hurdles to ratification.

In a joint statement released after their meeting in Manila, the leaders heralded the “high-standard” pact as offering a “new and compelling model for trade in one of the world’s fastest growing and most dynamic regions”. The proposed Trans-Pacific Partnership (TPP) would be the world’s largest, grouping 800 million people in countries as diverse as the United States, Japan and Brunei Darussalam.

South Korea and Indonesia have also both signalled interest in joining. But it is far from a forgone conclusion that the pact agreed in October will be implemented. The 11 other nations also have to get sign off from their legislatures.