US plans 'coalition of democracies' for trade but won't join CPTPP: Secretary of Commerce Gina Raimondo

Faced with a China that is seeking to portray itself as the new poster child of multilateralism, the United States must "run faster" to convince its allies about the merits of cooperating with Washington, the US Secretary of Commerce Gina Raimondo has said.

Speaking in Singapore at the Bloomberg New Economy Forum, Raimondo said the US had its own plans to step up regional trade cooperation even as China contemplates joining the CPTPP pact that makes up about 15 per cent of global trade.

The 11-nation Comprehensive and Progressive Agreement for Trans-Pacific Partnership is derived from the Trans-Pacific Partnership, the sprawling multilateral trade pact championed by President Barack Obama but later torpedoed by Donald Trump when he took office in 2017.

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With President Joe Biden now in power, there is still little appetite across the political divide in Washington for the US to be part of the CPTPP, given the perception that such mega trade agreements result in the destruction of blue-collar US jobs.

While the Biden administration has no plans to join the CPTPP, it is pinning hopes on a new economic framework involving regional allies, Raimondo said in an interview with Bloomberg's editor-in-chief John Micklethwait.

"We're likely to launch a more formal process in the beginning of next year which will culminate in a proper economic framework," Raimondo said, noting that this pact would among other things help the US and its allies maintain a "secure supply chain".

The former governor of Rhode Island was in Singapore following a visit to Japan, and is due to visit Malaysia next. Simultaneously, the US trade representative Katherine Tai is visiting Japan, South Korea and India. On Wednesday, with Tai visiting Tokyo, Japan and the US jointly announced a new US-Japan Partnership on Trade to facilitate talks on trade issues critical to both economies.

Raimondo said her ongoing Asia tour was aimed at "beginning the discussions [and] laying the groundwork" for the new framework.

The Biden administration has no plans to joint the CPTPP, according to US Secretary of Commerce Gina Raimondo. Photo: Reuters alt=The Biden administration has no plans to joint the CPTPP, according to US Secretary of Commerce Gina Raimondo. Photo: Reuters

Asked by Micklethwait if the new framework was the "trade equivalent" of a "coalition of democracies" involving complicated alliances rather than specific trade pacts, Raimondo agreed.

She acknowledged that it was up to countries that are currently party to the CPTPP to decide whether China should be allowed into the pact.

"I will say this, China is going to do what China is going to do, and whether or not the current members of CPTPP allow China to come in, that will be as it will be," she said. America's alternative plan, she said, was "not about China".

"This is about developing robust commercial and economic relationships with our partners in the Indo-Pacific where we have had robust relationships for a long time," she said.

"The elephant in the room, the reality is America... has been largely absent in the past few years, and when I am here in the region there seems to be a strong pull to have us back."

The current administration was focused on creating good jobs at home but "we are equally focused on re-strengthening our relationships with our allies - in Europe, in the Indo-Pacific and around the world," Raimondo said.

"We're talking about onshoring but we're also talking about friendshoring."

She added: "Take semiconductors - it is a global, complex supply chain. That won't change and that is OK. We don't think everything can be domestically produced so we want to work with our allies and friendshore."

The commerce secretary, who spoke after the Chinese Vice-President Wang Qishan addressed the forum by video link, was also asked whether Beijing was "taking up the banner of multilateralism" while the US - with its aversion to multilateral trade pacts - was pursuing "a la carte" style deals.

Wang said China "cannot develop in isolation from the world and nor can the world develop without China". He touched on the US-China relationship as well, saying both sides should "act on the important common understandings reached between the two presidents, keep their focus on cooperation and manage and control differences".

Raimondo said the US had to "kind of run faster" in the face of China's push to champion multilateralism.

"We have our strategy... America is a fantastic, and benign and collaborative ally and partner. We have some of the best entrepreneurs, the deepest capital markets in the world and a long history of working in this region," she said.

"So we're going to do what we know how to do and China will do what it's going to do."

The dynamics of the US-China relationship was just one of the hot topics of discussion at the forum, one of the biggest physical gatherings of the global business elite since the Covid-19 pandemic began. The highs and lows of the recent COP26 climate summit, the future of carbon pricing and the metaverse also featured in the first day of sessions.

Speakers, some of whom participated via video link, included the US elder statesman Henry Kissinger and Google chief executive Sundar Pichai.

Singapore's Prime Minister Lee Hsien Loong is expected to speak during a gala dinner on Wednesday evening.

Billed as an Asia-and-Africa-focused rival of sorts to the annual World Economic Forum in Davos, the Bloomberg New Economy Forum is being held in Singapore for the second time since the inaugural edition was held in the city state in 2018.

This article originally appeared on the South China Morning Post (SCMP).

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