By Ryan Dube
LIMA, Peru -- Donald Trump's pledge to dismantle U.S. trade agreements is leading some of the closest U.S. allies in Latin America to reassess trade priorities, opening the door for China to strengthen its ties with the region.
On Friday, Chinese President Xi Jinping will arrive in Peru's capital for a meeting with leaders from 21 Pacific Rim countries that make up the Asia-Pacific Economic Cooperation, which accounts for half of global trade. U.S. President Barack Obama, Russian President Vladimir Putin and Japanese Prime Minister Shinzo Abe will also participate.
On the minds of many here will be what Mr. Trump's election means for the regionafter he campaigned against trade agreements that he blamed for gutting American jobs. Mr. Trump has promised to renegotiate the North American Free Trade Agreement and ax the Trans-Pacific Partnership, a U.S.-led accord to lower trade barriers with 11 other nations around the Pacific, including Chile, Mexico and Peru. He said he has plans to build a wall on parts of the Mexican border and deport two million to three million illegal immigrants, many from Latin America.
President Obama's decision to shelve plans to get congressional approval for the Pacific trade pact was a bitter blow for the White House. But it could provide a boost for the trade ambitions of China, which was excluded from the TPP, as countries look to reposition their trade agendas to support growth.
"This is a huge moment for China," said Eric Farnsworth, vice president of the Council of the Americas and Americas Society. "I think the Chinese are anticipating getting full value out of it to be able to show that the U.S. may be taking an inward track and China is ready to welcome the world."
Representatives for Mr. Trump weren't available but in numerous comments he has said he would base his trade policies on what's best for U.S. workers, which he has signaled could mean more protectionist policies.
Peruvian President Pedro Pablo Kuczynski, a 78-year-old former Wall Street banker who chose to visit China on his first official trip, joked earlier this year that he would "grab a saw and cut" ties with the U.S. if Mr. Trump won. Mr. Kuczynski was more serious recently, warning about protectionism and saying he would support a Pacific trade accord that added China and Russia if the U.S. pulls out.
His trade minister, Eduardo Ferreyros, said this week he was hopeful Mr. Trump wouldn't scrap the deal, but Peru was now interested in joining the Regional Comprehensive Economic Partnership, a Chinese-led free-trade agreement of 16 countries seen as a rival to the TPP.
"We are open to new alternatives," he said. "If the TPP doesn't advance in the short term due to evaluations by the new [U.S.] president, that doesn't prevent us from continuing to advance our trade agenda."
Luis de la Calle, a former Mexican trade negotiator, said that other TPP members could continue with a modified accord if Mr. Trump pulls the U.S. out of the pact.
"We can wait to see what Trump does, or we can do things ourselves," he said. "If the U.S. doesn't want it, fine. We'll go ahead. It would be a signal to Mr. Trump that the world won't stop believing in trade."
Chilean Foreign Relations Minister Heraldo Muñoz raised concerns about the implications for the TPP after Mr. Trump's victory. On Friday, he stressed the importance of the APEC meeting to counter a pushback against globalization seen in the U.S. and Europe.
"The leaders of the economies of the Asia Pacific arrive with a clear message," he said. "Protectionism, disbanding and isolation are not solutions to the unrest of citizens."
Mr. Muñoz told The Wall Street Journal that Chile would hold talks with other TPP members to discuss moving forward with the deal without the U.S. He said Chile would also be open to joining the RCEP. While Mr. Muñoz said the Chilean government was waiting to see if Mr. Trump would actually implement his campaign promises, he added that a U.S. retreat from being a champion of free trade could open the door for other countries, like China, to fill the void.
"Chile has prospered, it has grown economically, poverty has fallen... thanks to its opening to the world," he said. "What Chile wants is to deepen its integration with others."
U.S. trade officials attending the summit acknowledge that pulling out of the TPP would have economic and political costs as China couldtake on a bigger role.
"It is not a hypothetical concern," said U.S. Trade Representative Michael Froman. "We see people around the table here right now, talking about that, if TPP doesn't move forward, then they are going to have to put their eggs in a RCEP basket."
Mr. Xi has courted resource-rich Latin American nations since taking office in 2013, promoting commercial ties during trips to Mexico, Argentina, Brazil and Venezuela. On Thursday, he arrived in Ecuador, where he planned to inaugurate a $2 billion Chinese-built hydroelectric project. After the APEC summit, he will travel to Chile, a top supplier of copper to the Asian nation.
In a column in Peru's El Comercio newspaper on Thursday, Mr. Xi highlighted the country's historical ties with China, pointing to the migration of Chinese residents to Peru a century ago and recent surge in Chinese investments in areas like mining, oil and gas.
"United by the same dream,there isn't a more timely moment for the deepening of our multidimensional cooperation," he said.
Write to Ryan Dube at email@example.com
(END) Dow Jones Newswires
November 18, 2016 16:45 ET (21:45 GMT)
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