Trump Declares New World-Trade Order -- 4th Update
By Jake Maxwell Watts, Chuin-Wei Yap and Jacob M. Schlesinger
DA NANG, Vietnam--President Donald Trump delivered his vision for a new American economic relationship with Asia here Friday, one that eschews big trade deals the U.S. has long favored for country-to-country bargaining.
Moments later, Chinese President Xi Jinping took the same stage at a Pacific Rim summit and praised the kind of multicountry treaties that have underpinned American influence in the region for decades.
The dueling remarks laid out the battle plans of the world's two largest economies as Mr. Trump seeks to remake trade policies that have made Asia the globe's fastest-growing region and flooded U.S. consumers with cheaper goods.
The speeches also highlighted a contrast between rhetoric and reality, as Mr. Trump has yet to find willing partners for new bilateral deals, much of China's market remains under government control and the openings that emerged from a Trump-Xi summit in Beijing could prove smaller than they appear.
In his speech to business leaders at the Asia-Pacific Economic Cooperation forum, Mr. Trump, a Republican, repudiated the policy of predecessors from both parties, where Washington took the lead in shaping market-opening rules for the region.
But he said that the U.S. had no intention of retreating from Asia, seeking to allay the fears of allies in the region. "I will make bilateral trade agreements with any Indo-Pacific nation that wants to be our partner and will abide by the principles of fair and reciprocal trade," Mr. Trump said.
He also disputed the notion that the U.S. itself had benefited from Asia's growth and liberalization, saying "we are not going to let the United States be taken advantage of any more."
Mr. Trump rejected the principle of stitching together the sprawling region through a common set of rules and agreements among multiple countries, a defining goal of the 21-member APEC, which was founded with U.S. guidance in 1989.
"What we will no longer do is enter into large agreements that will tie our hands, surrender our sovereignty and make meaningful enforcement practically impossible," Mr. Trump said.
The administration of former President Barack Obama, a Democrat, had sought to bind the region's economies with the U.S.'s through the Trans-Pacific Partnership, a 12-nation pact that excluded China. Mr. Trump withdrew Washington from the TPP after he took office. The remaining 11 nations are meeting on the sidelines of the APEC meeting in Vietnam--without U.S. participation--to try to keep the bloc alive.
Moments after Mr. Trump's address, Mr. Xi echoed the rhetoric of Mr. Trump's U.S. predecessors.
"We are seeing profound changes in economic globalization," the Chinese leader said, in his first address to a major multinational forum since consolidating executive power last month. "We should uphold multilateralism, pursue shared growth through consultations and forge closer partnerships."
Since Mr. Trump's election a year ago on an "America First" platform, Mr. Xi has repeatedly sought to portray China as the new guardian of free trade.
Mr. Xi's campaign has drawn skepticism, especially in Asia. At the same time that he has embraced the rhetoric of free trade, he and his government have solidified their control of the Chinese economy and espoused a "Made In China 2025" industrial policy that seeks Chinese leadership in a wide range of sectors, from robotics to self-driving cars.
China continues to face a long list of allegations of unfairly priced and illegally subsidized exports, and complaints by foreign firms about restrictions on access to its market.
One big question hanging over the Asian economy left unanswered by Mr. Trump's week in the region is just how he plans to deal with China, which has, by far, the biggest goods trade surplus with the U.S., valued at $347 billion last year.
In Mr. Trump's two-day China visit, which preceded his trip to Vietnam, Mr. Trump hailed progress in opening China's market to U.S. companies, marking the signing of business deals that officials said would be worth billions of dollars--though many in the $250 billion pool of deals aren't full contracts.
And shortly after Mr. Trump left China, the government said Friday that it was taking a major step in opening its financial sector, saying it would relax restrictions on foreign ownership in the securities and banking sectors.
It was a change long sought by previous U.S. administrations and by Wall Street, and it potentially paves the way for Wall Street investment banks to increase their presence in China's domestic market--though profits may be harder to find in China's finance sector these days.
Messrs. Trump and Xi didn't find common ground on a long list of trade disagreements between the two countries. Mr. Trump's aides have said they are preparing possible trade penalties to impose on China in the coming months. Chinese officials have threatened to retaliate. An open trade war between the two would have great implications for Asia.
TPP has been appealing to many Asian nations as a vehicle to contain China economically, amid a fear of Chinese dominance that has spurred Japan, Vietnam, and other TPP supporters to try to salvage the pact. Negotiators had been aiming to announce a deal at APEC this week, but early Saturday said that while they had reached consensus on "core elements," disagreements remained about issues including dispute settlement and state-owned enterprises, according to a draft statement seen by the Journal.
"What we have achieved is progress but we also identified what work needs to be done," Canadian Trade Minister François-Philippe Champagne told reporters Saturday morning. He said more work needed to be done on cultural exemptions and the automotive sector.
TPP supporters seek a regional commercial system built around U.S.-style rules--and hope to keep the pact structured in a way that would allow Washington to join in the future, said people familiar with the talks.
But just as officials in many Asian countries said they are suspicious about China, they also said they are nervous about the implications of Mr. Trump's rejection of the U.S.'s role in leading a regional bloc and his broader questioning of the value of free-trade agreements.
Asian partners have been concerned by Mr. Trump's bid to renegotiate--and threats to kill--a five-year-old bilateral free-trade pact with South Korea and the 23-year-old North American Free Trade Agreement with Mexico and Canada.
"While he did say something today about seeking mutually beneficial agreements, until they can convince partners and illustrate and demonstrate there is a win-win, there won't be a long line of countries lining up for bilaterals," said James W. Fatheree, the vice president for Asia at the U.S. Chamber of Commerce, which has feuded openly with Mr. Trump's administration on trade policy.
No countries have so far engaged in negotiations in response to Mr. Trump's repeated calls for more bilateral trade pacts, though administration officials have said they want to launch agreements with TPP countries, notably Japan and Vietnam.
Mr. Trump's schedule included a meeting with the other APEC heads of government in a closed-door retreat in Da Nang on Saturday, before flying to Hanoi for a meeting with President Tran Dai Quang of Vietnam. He then was set to travel to the Philippines for a meeting with President Rodrigo Duterte and a summit with Southeast Asian leaders over the weekend.
Natasha Khan contributed to this article.