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Trump’s trade stance pushes Asian countries toward regional alliances

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Asian countries are responding to U.S. President-elect Donald Trump’s protectionist rhetoric by placing greater emphasis on regional and bilateral trade agreements aimed at promoting transnational economic cooperation without U.S. involvement, analysts say.

After being sworn in for a second term on January 20, 2024, Trump made tariffs a cornerstone of his campaign, pledging to impose duties of up to 20% on U.S. imports across the board, as well as a 60% tariff on Chinese goods.

At the recent Asia-Pacific Economic Cooperation (APEC) forum in Peru, leaders from many of the 21 member economies called for greater regional economic integration as geopolitical tensions rise and supply chains become increasingly fragile.

China signed a stronger trade agreement with Peru.

Indonesia finalized a trade deal with Canada.

Singapore’s Prime Minister, Lawrence Wong, emphasized the importance of reviving the Asia-Pacific Free Trade Area, an agreement still under negotiation among APEC economies.

“APEC is more important now than it was before,” Wong said, highlighting the urgency of collaboration.

Multilateral regional economic partnerships

Trade deals excluding Washington, such as the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), are expected to become more vital for Asian countries in the coming years.

“This will help us manage some of the chaos and damage from the collapsing global system,” said Deborah Elms, head of trade policy at the Hinrich Foundation, an Asia-based group promoting sustainable trade, in an interview with Nikkei Asia.

The RCEP, a trade agreement involving 15 Asia-Pacific countries—including China, Japan, South Korea, and ASEAN members—was signed in November 2020 after eight years of negotiation. Together, these countries account for roughly 30% of global GDP.

In 2017, Trump withdrew the U.S. from the Trans-Pacific Partnership (TPP), leaving Japan to lead the revised agreement. Renamed the CPTPP, the 11-member group, including Canada, Australia, New Zealand, Singapore, and Vietnam, is entering its sixth year. Trade between members rose 5.5% between 2018 and 2021. The United Kingdom joined in December, while China has expressed interest in becoming a member.

Given Trump’s anti-globalization stance, analysts suggest that Japan should expand the CPTPP by adding members and deepening cooperation with the European Union.

A Chinese delegate at APEC remarked, “At the end of the day, we have many trading partners.”

However, China’s own economic policies could pose challenges to regional trade cooperation.

Priyanka Kishore, founder of consultancy Asia Decoded, emphasized that China must boost domestic consumption and increase imports to strengthen regional trade.

“China has a crucial role to play in supporting the region’s external demand,” Kishore told Nikkei Asia, adding, “It needs to do more if it wants to be the champion of intra-regional trade.”

Finding new trading partners could take years

Higher U.S. tariffs could hit Asian economies hard, particularly those with trade-to-GDP ratios exceeding 100%, such as Singapore, Hong Kong, and Vietnam. Currently, only Singapore and South Korea have free trade agreements with the U.S.

Tariffs, paid by importers in the U.S. and collected by U.S. Customs and Border Protection, raise costs that are often passed on to consumers. However, they also hurt foreign exporters by making their goods less competitive.

According to research by Yang Zhou, an economist at Fudan University, the U.S.-China trade war cost China $35 billion, and the U.S. $15 billion in 2018 alone.

A study by Global Trade Alert, an independent organization monitoring world trade policies, explored how Asian countries might cope with losing access to the U.S. market. It concluded that it would take these countries an average of five years to establish new trade partnerships.

For countries like Thailand, the timeline could extend to 24 years, as they shift trade to China, the EU, Vietnam, and Japan. For South Korea, it might take until 2038 to fully replace the U.S. as a trading partner.

ASIA

Syria will not follow Afghanistan’s Taliban model of governance

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In an astonishing statement, Ahmed Shará, also known as Abu Mohamad Jolani, the leader of the Hayat Tahrir al-Sham (HTS) said that he will allow the girls to go to schools and will not turn Syria like Afghanistan under the rule of the Taliban.

Jolani, the de facto ruler of Syria, said that he will distance himself from the Taliban’s strict policies on women’s rights, and said that Syria will not follow the Taliban’s mode of governance.  

Jolani, who brought down the government of Bashar al-Assad and also widely welcomed by the Taliban, said that he believes in the education of women and girls and will not make Syria like Afghanistan.

“Syria is a diverse society with various ideas, unlike Afghanistan, which is more tribal. The Afghan model cannot be applied here,” Jolani told a BBC reporter.

Jolani says that Syria is a diverse society with various ideas, unlike Afghanistan, which is more tribal.

Jolani’s comment came when the Taliban congratulated the HTS-led victory by Jolani over Assad’s regime after years of fighting. The Afghan Foreign Ministry celebrated Jolani’s victory through a statement and hoped Jolani can bring peace and stability in the country.

“It is hoped that the power transition process is advanced in a manner that lays the foundation of a sovereign and serve-oriented Islamic government in the line with the aspiration of the Syrian people; that unifies the entire population without discrimination and retribution through adoption of a general assembly; and a positive foreign policy with world countries the safeguard Syria from a threat of negative rivalries of foreign actors and creates conditions for the return of millions of refugees,” the statement by Taliban Foreign Ministry.

However, Jolan’s position on the rights of women and girls is in great contrast with the current view of the Taliban leadership. Women and girls have been banned from education and work since the return of the Taliban in August 2021, following the collapse of the Republic System and withdrawal of the US troops from Afghanistan. Girls and women are even banned from medical institutions and visiting public spaces.

Jolani says he has a plan to create a government based institution and a council chosen by the people. 

The situation got worse when the Taliban’s Ministry for the Promotion of Virtue and Prevention of Vice called women’s voices “immodest” compounding their exclusion from public life. This year, it has been marked as three years since girls were banned from pursuing education over sixth grade. Besides that, on December 20, 2022, the Taliban’s Ministry of Higher Education announced that women would be barred from attending public and private universities.    

In an interview with CNN, Jolani said that he has a plan to create a government based on institutions and a “council chosen by the people.”

“When we talk about objectives, the goal of the revolution remains the overthrow of this regime. It is our right to use all available means to achieve that goal,” said Jolani.

“The seeds of the regime’s defeat have always been within it… the Iranians attempted to revive the regime, buying it time, and later the Russians also tried to prop it up. But the truth remains: this regime is dead.”

Moreover, he also said the Syrian people are the “rightful owners” of the country after the ouster of Assad, and declared a “new history” has been written for the entire Middle East.

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Yoon summoned again for questioning on treason charges

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A joint law enforcement team investigating South Korea’s martial law case announced on Friday that it has issued a second summons to ousted President Yoon Suk Yeol, requesting his presence for questioning next week. The inquiry concerns his alleged involvement in the failed implementation of martial law.

The team has scheduled the questioning for 10:00 a.m. next Wednesday at the Corruption Investigation Office for Senior Officials (CIO) headquarters in Gwacheon, located just south of Seoul. This marks the second summons after Yoon refused to cooperate with the initial notice earlier this week.

The decision to hold the questioning on a public holiday appears to be a strategic move by the CIO, likely aimed at addressing security concerns. The office confirmed that the summonses were delivered via express mail and electronically to both Yoon’s residence and the presidential office in Yongsan. Notably, after Yoon’s team refused to accept the first subpoena, the CIO opted against delivering the documents in person for this round.

The investigation focuses on Yoon’s role in the December 3 martial law declaration, which he revoked following a vote in the National Assembly. If Yoon continues to disregard the summons without valid justification, the CIO may seek a court order to detain him for up to 48 hours.

Yoon faces allegations of sedition and abuse of office, charges that have gained traction since his dismissal by parliament last Saturday. His suspension from office remains in effect pending a decision by the Constitutional Court, which will determine whether he is permanently removed or reinstated.

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Xi Jinping champions economic diversification during Macau visit

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During a three-day visit to Macau commemorating the 25th anniversary of its return to Chinese sovereignty from Portugal, President Xi Jinping emphasized the importance of economic diversification and maintaining the “one country, two systems” framework.

Speaking at the swearing-in ceremony for Macau’s new Chief Executive Officer, Sam Hou-fai, Xi urged the administration to make economic diversification the city’s primary focus. Sam, the fourth leader since the 1999 handover and the first mainland-born Chinese official to hold the position, is expected to align closely with Beijing’s objectives to reduce Macau’s reliance on gambling. The gambling industry, which accounts for approximately 80% of Macau’s tax revenue, has been the cornerstone of its rapid economic growth in recent years.

“Macau should prioritize proper economic diversification,” Xi stated, calling for enhanced policy support and investment in emerging sectors. He also reiterated the significance of the “one country, two systems” principle, stressing its role in ensuring the city’s “prosperity and stability” for the long term.

Xi’s visit included stops at the Macau University of Science and Technology, where he explored laboratories focusing on traditional Chinese medicine and planetary science. He also attended a cultural performance at the Macau Dome and met with local stakeholders, according to Chinese state media. His trip marked a shift in tone, with Anthony Lawrence, founder of Intelligence Macau, noting that it was the first time Xi publicly praised Macau for its progress rather than delivering critiques or instructions.

Since the liberalization of Macau’s gaming monopoly in 2002, the city has attracted significant foreign investment, including from prominent US casino operators such as Las Vegas Sands, MGM, and Wynn Resorts. However, the economy struggled during the COVID-19 pandemic due to travel restrictions, and recovery has only recently begun.

On Friday, Macau’s casinos were bustling with visitors, while non-gaming initiatives like a stamp exhibition co-organized by MGM China and Beijing’s Palace Museum showcased the city’s efforts to diversify its offerings.

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