China and the US both have a role in promoting free trade in the Asia-Pacific region
Dan Steinbock says even before Trump’s scepticism, the US used trade as a geopolitical weapon against China, and now truly ‘free’ trade in the Asia-Pacific needs to include both major powers
In reality, the world of free trade is now in the kind of flux that has not been since the post-1945 era.
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After the fifth round of Nafta talks ended amid simmering tensions, Canada and Mexico have hedged their bets against a potential collapse by pushing for deals with new partners, particularly China and other Asian countries.
Nafta is America’s post-cold war blueprint for other free trade deals. It came into force in 1994, amid the globalisation boom. Despite the fanfare, accusations of misconduct surfaced barely a year after the deal.
President Bill Clinton’s alleged abuses of public power led to a special counsel in the 1990s. Mexico’s president, Carlos Salinas, was appointed World Trade Organisation director general, but fled Mexico as his brothers were prosecuted in a multimillion-dollar fraud case.
In public, Nafta was promoted as a receipt for regional success, yet its record has proven mixed. While the agreement benefited consumers in three countries, it also contributed to investment outflows, unemployment and offshoring.
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