Daily Report: "Trade Circle without the United States" is Gradually Taking Shape
Reference Message Network reported on April 21 that the Japanese Economic News published an article titled "Trump's Tariffs Are Encouraging the Formation of 'Trade Circles Without America'" on April 18. The author is the editorial board member Takefumi Sano. The full text is excerpted as follows:
Affected by US President Donald Trump's continuous introduction of high tariffs, many countries and regions including Japan are accelerating trade negotiations with the United States. Meanwhile, free trade circles constructed by countries and regions outside the United States are quietly advancing. The United States' abandonment of free trade is prompting countries and regions committed to trade diversification to engage in free trade agreement negotiations.
The UAE, along with Saudi Arabia, Bahrain, Oman, Qatar, and Kuwait, are members of the Gulf Cooperation Council. The EU launched free trade negotiations with the GCC in 1990 but suspended them in 2008. The UAE then proposed an independent negotiation plan with the EU. According to the judgment of European Commission Vice-President for Trade and Economic Security Kovačić, "the time is ripe for negotiations."
For the UAE, the EU is its second-largest trading partner, accounting for 8% of its non-oil trade. On the other hand, for the EU, the UAE is its largest investment and export destination in the Middle East-North Africa region. Both parties also expect to expand cooperation in renewable energy and green hydrogen.
Anticipating Trump's re-election in November 2024, the EU has been meticulously planning. In December last year, the EU completed free trade negotiations with Mercosur, including Brazil and Argentina, which had stalled for many years previously.
Moreover, the EU reached an agreement with Mexico to modify the existing free trade agreement and decided to reopen free trade negotiations with Malaysia, an ASEAN member state. It also agreed to complete free trade negotiations with India this year. Next up will be initiating free trade negotiations with the UAE. Latin America, Southeast Asia, India - now it’s the Middle East's turn. The EU's series of actions can be described as filling in the pieces of a free trade agreement puzzle left blank by the absence of the United States. It is expected that formal negotiations with Australia will begin after the Australian election in May.
According to WTO data, as of now, there are more than 600 regional trade agreements worldwide. Trump's tariffs are likely to further increase this number.
Let us now shift our focus to another party, the UAE. According to the country's growth strategy plan, the UAE will seek to diversify its economic model in the future,摆脱oil dependence, and become a trade and financial hub in the Middle East. The UAE has already signed free trade agreements with India and South Korea and is currently promoting negotiations with Mercosur and ASEAN. Economic cooperation talks with Japan began last September. The next goal is the EU. In Africa, the UAE has signed free trade agreements with Kenya and Morocco, which can be seen as attempts to expand free trade networks outside the US and China.
The EU also places great expectations on the UAE. According to the EC, it hopes that the UAE will become a medium for the EU to strengthen its relations with the GCC.
The movement of Costa Rica, a Central American country with only five million people, deserves attention. This small country is very active in signing free trade agreements with various countries and regions. Costa Rica has also officially applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) led by Japan.
It must be noted that even if free trade agreements are signed with countries and regions outside the United States, they may not completely compensate for the decline in exports to the United States caused by the high tariff policies of the world's largest economy, the United States. The reason why the "going without America" trend is expanding is mainly because all economies are forced to broaden the scope of their trading partners and expand the territory of free trade as much as possible.
For Japan, expanding the coverage of economic cooperation agreements while negotiating with the United States is also a pressing task. First, choosing to expand the CPTPP; second, choosing to initiate negotiations for an economic cooperation agreement with Mercosur; third, choosing to study the signing of bilateral economic cooperation agreements with the African Continental Free Trade Area. Japan's trade policy is not only about winning negotiations with the United States and achieving tariff reductions but also possibly reaching a super free trade agreement between the CPTPP and the EU. Such a grand blueprint deserves our serious study. (Translated by Liu Lin)
This photo was taken on April 2 outside the EU headquarters in Brussels, Belgium. (Xinhua News Agency)
Original article: https://www.toutiao.com/article/7495673282037908031/
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