China, Japan must stand together to protect open global trading environment

By Zhao Jinping Source:Global Times Published: 2018/4/28 15:49:31

The fourth China-Japan high-level economic dialogue was held on April 16in Tokyo. This dialogue, which resumed after an eight-year pause, yielded positive results. The concerns expressed by the two sides went beyond the traditional bilateral context and involved regional and multilateral cooperation issues, fully demonstrating the regional and global significance of strengthening cooperation between these two major economic powers.

China and Japan should further strengthen bilateral cooperation in three major areas: joint opposition to unilateralism and trade protectionism; joint promotion of the economic integration process in East Asia and joint efforts to create a new situation for trade and investment and third-party market cooperation in the context of the Belt and Road (B&R) initiative.

First, we should jointly oppose unilateralism and trade protectionism to uphold the normal international trade order. Since US President Donald Trump took office, the US government has been pursuing unilateralism and trade protectionism and ignoring WTO rules to provoke trade disputes by adopting a series of measures such as unilaterally imposing high tariffs. These actions have aggravated the risk of a global trade war and added new uncertainties to the global economy, which had been recovering.

Based on WTO statistics for 2016, if imports of the US decrease by 10 percent due to protectionist measures, global trade will decline by 1.3 percent. As a result, economies that are more dependent on the US market will be hit more than the average.

What's more important is that unilateralism and trade protectionism may seriously undermine the foundation of global economic growth.

As both China and Japan are large economies, a benign external environment and a normal international trade order are very important to their economic development. Many times in the past, China and Japan were primary victims of trade protectionism.

Therefore, China and Japan need to stand firmly against unilateralism; strengthen cooperation in important multilateral and regional policy coordination mechanisms such as the WTO, G20 and APEC; jointly oppose trade protectionism; maintain the normal international trade order, and create a more favorable trade environment and opportunities for the rest of the world.

In the dialogue this time around, China and Japan discussed the world economic situation and reached a consensus on jointly safeguarding the multilateral trading system and advancing the process of economic globalization. This outcome has positive significance. 

However, judging from the expectations of the international community, Japan's attitude toward opposing unilateralism and trade protectionism should also be clearer and involve more active measures.

Second, we should make new progress in negotiating regional free trade agreements. Regional economic integration is an important part of globalization and has positive significance for promoting the liberalization and facilitation of global trade and investment. 

The US policy shift since 2017 has caused high-level regional and multilateral pacts such as the Trans-Pacific Partnership (TPP),Transatlantic Trade and Investment Partnership (TTIP) and Trade in Services Agreement (TiSA) to suffer setbacks, casting a shadow over the process of regional and global trade and investment liberalization. 

However, due to the efforts of most countries, the number of regional trade agreements in effect, signed and initiated continues to increase.

In addition, the trilateral Japan-China-South Korea Free Trade Agreement negotiations have continued for many years, even though they are constantly affected by political developments.

How to quickly achieve agreement on the Regional Comprehensive Economic Partnership (RCEP) and the trilateral free trade agreement, which together will provide a solid foundation for an Asia-Pacific free trade agreement, is an important issue linked to institutional cooperation and economic globalization in East Asia.

In the dialogue, China and Japan reached a consensus on speeding up negotiations on the China-Japan-South Korea Free Trade Area and promoting the early conclusion of the RCEP negotiations.

The focus now is on how to accelerate the implementation. To this end, it is necessary to strengthen dialogue and policy coordination among relevant countries.

Third, we should create new conditions for Sino-Japanese trade and investment and third-party market cooperation in the context of the B&R initiative. There has been doubt related to the B&R initiative in some countries. In particular, some Western politicians have given the initiative geopolitical labels.

Because of the important role of the B&R initiative in building a new platform for international cooperation and adding new impetus to economic development, it will be able to inject new momentum into open, balanced and win-win economic globalization. As beneficiaries of economic globalization, China and Japan will share more opportunities and achievements through the B&R initiative.

The dialogue also reached a strong consensus on strengthening Sino-Japanese cooperation, including the important aspect of continuing to promote cooperation with third-party companies in third-party markets, indicating that Japan has fully realized the strategy for the internationalization of Japanese companies. 

China's joint construction of the B&R initiative creates an important basis for investment and trade cooperation between enterprises of the two countries in a broader market.

The key lies in how to strengthen communication and coordination on the basis of consensus, establish mechanisms to share experience and advantageous conditions, promote concrete project cooperation, create business opportunities for enterprises of both countries and play an active role in promoting economic growth and employment for third parties.

The author is a research fellow with the Development Research Center of the State Council. bizopinion@globaltimes.com.cn



Posted in: EYE ON ECONOMY

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