The Black Vault

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US President Barack Obama says the US-China relationship is "cooperative and constructive" and it's important the two nations set "clear rules of the road" for trade and investment.

Obama conveyed the message on Tuesday to China's outgoing premier, Wen Jiabao, before the two met alone on the sidelines of a summit of Asian countries taking place in Cambodia.

Wen congratulated Obama on his re-election on behalf of China's outgoing and incoming leadership.

The meeting was most likely Obama's last with Wen.

He and Chinese President Hu Jintao are stepping down in China's first leadership transition in a decade.

Despite tensions between the two economic powerhouses, Hu said he and Obama share the view that the US-China relationship is one of the most important in the world.

Meanwhile, Japanese Prime Minister Yoshihiko Noda warned of an increasingly severe security environment in Asia amid raging territorial disputes, as he met Obama.

The Japanese leader, widely expected to lose power in an election next month, praised the US leader's foreign policy pivot towards the region.

"With the increasing severity of the security environment in East Asia, the importance of the Japan-US alliance is increasing," Noda said through a translator.

Obama, who faces the prospect of building ties with another Japanese government as Noda's centre-left administration faces defeat in the election, concentrated on the enduring strength of US-Japan relations.

"This becomes another opportunity for us to reaffirm the extraordinary alliance," he said.

Obama, who often bills foreign trips as a trade-related extension of his effort to restore prosperity at home, said the two leaders would discuss "economic issues that the world is facing right now".

He added it was "very important" for the allies to "coordinate effectively" on trade, investment and jobs.

Noda's comments referred to a flurry of territorial disputes that are increasing tensions in Asia, and drawing the United States as a guarantor of the freedom of maritime navigation, into indirect conflict with rising China.


Australian prime Minister, JULIA Gillard and the other East Asia Summit leaders will tomorrow agree to negotiate the world's broadest trade pact, covering 16 countries, three billion people and $16.7 trillion in combined gross domestic product.

Getting the Regional Comprehensive Economic Partnership negotiation started is the priority item on Australia's agenda for the summit, with the Prime Minister arriving in the Cambodian capital this morning.

The RECP encompasses the 10 ASEAN members and their so-called Plus Six dialogue partners Australia, China, India, Japan, South Korea and New Zealand.

Agreement to move the RECP forward tomorrow has been assured in the past month by China and India confirming their participation.

The negotiation is expected to take at least two years, though all the Plus Six countries are already engaged in free trade agreements with ASEAN. The other East Asia Summit participants, the US and Russia, are not included.


The US is alone in pushing an American-focused Trans Pacific Partnership free trade agreement, of which Australia is also a member. Although Vietnam, Singapore and Malaysia have also signed up for the TPP, other senior ASEAN members are dubious about an agreement that doesn't embody "ASEAN centrality".

Australian Trade Minister Craig Emerson called the RECP "one pathway to the mountaintop of a free trade area for Asia and the Pacific and we'll be in there vigorously negotiating for it".


The ASEAN group is made up of 16 nation's.

Indonesia, Malaysia, the Philippines, Singapore and Thailand. Brunei, Burma (Myanmar), Cambodia, Laos, & Vietnam, Australia, China, India, Japan, New Zealand, and South Korea.

Australia will push for a new regional trade deal at the summit, where 16 leaders are expected to agree to talks on the Regional Comprehensive Economic Partnership (RCEP).

The RCEP would involve the 10 members of ASEAN plus Australia, New Zealand, China, Japan, the Republic of Korea and India.

The agreement would bring together existing ASEAN free-trade agreements, including the ASEAN-Australia-New Zealand FTA which is being seen as a benchmark for the broader deal.

The new ASEAN-Australia-New Zealand free trade zone comprising 16 countries - home to half the world's population and accounting for one-third of global gross domestic product was signed on 01 January 2010.

At the Asean Plus Three Summit' Asean leaders and their counterparts from China, Japan and South Korea accepted a report on a feasibility study on the proposed East Asia Free Trade Area (EAFTA).

A separate report on another study on the Comprehensive Economic Partnership in East Asia (CEPEA) - adding India, Australia and New Zealand to the Asean Plus Three - was submitted at the East Asia Summit.

The ASEAN-Australia-New Zealand Free Trade Agreement will come into force 01 January 2010, following discussion between ASEAN leaders at the East Asia Summit in Thailand late October 2009.

The Free Trade Agreement will establish the ASEAN-Australia-New Zealand Free Trade area, spanning 12 economies and more than 600,000 million people and a combined GDP of US$3.1 trillion. The Agreement covers 20 per cent of Australia's two-way trade, worth US$112 billion and will eliminate tariffs on 90 per cent of Australia's current exports to ASEAN nations by 2020.

The East Asia Summit (EAS) is a forum held annually by leaders of, initially, 16 countries in the East Asian region. Membership expanded to 18 countries including the United States and Russia at the Sixth EAS in 2011.

EAS meetings are held after annual ASEAN leaders’ meetings. The first summit was held in Kuala Lumpur on December 14, 2005.
Membership expanded to 18 countries including the United States and Russia at the Sixth EAS in 2011, when Russia & the United States where given observer status in 2005.

ASEAN formally invited the United States and Russia to join the group from 2011.

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Tue Nov 20, 2012

(Reuters) - In his first meeting with a Chinese leader since his re-election, U.S. President Barack Obama said on Tuesday Washington and its chief economic rival must work together to "establish clear rules of the road" for trade and investment.


His comments on the final leg of a three-day Southeast Asian trip follow a U.S. election campaign in which China was repeatedly accused of unfair trade practices and illustrate the work ahead in a region already simmering with tension over territorial disputes involving Beijing.

"It is very important that as two of the largest economies in the world that we work to establish clear rules of the road internationally for trade and investment," Obama told Chinese Premier Wen Jiabao before an East Asia Summit of Asia-Pacific leaders in the Cambodian capital Phnom Penh.

During the U.S. election campaign, Obama was denounced by his rival Mitt Romney for being "a near-supplicant to Beijing" on trade matters, human rights and security issues. Obama accused Romney of shipping U.S. jobs to China when he was a businessman.

In Asia, those trade tensions overlap with friction over Chinese sovereignty claims that surfaced on Monday at a Southeast Asian leaders' summit. In July, a foreign ministers meeting of the Association of Southeast Asian Nations (ASEAN) failed to agree on a communiqué for the first time ever because of the row.

"I'm committed to working with China and I'm committed to working with Asia," Obama said. China and the United States had a "special responsibility" to lead the way on sustained global growth, he added before the meeting was closed to media.

Wen highlighted "the differences and disagreements between us" but said these could be resolved through trade and investment.

Obama's visit to Cambodia, the first by a U.S. president, underlines an expansion of U.S. military and economic interests in Asia under last year's so-called "pivot" from conflicts in the Middle East and Afghanistan.

The Philippines, Australia and other parts of the region have seen a resurgence of U.S. warships, planes and personnel, since Obama began shifting foreign, economic and security policy towards Asia late last year, unnerving Beijing.

Japanese Prime Minister Yoshihiko Noda said mounting Asian security problems raise the importance of the U.S.-Japan alliance, a veiled reference to tensions over Chinese sovereignty claims and maritime disputes.

"With the increasing severity of the security environment in East Asia, the importance of the Japan-U.S. alliance is increasing," Noda told Obama.

STRAINED TIES

Beijing claims the South China Sea as its territory based on historical records, setting it directly against U.S. allies Vietnam and the Philippines. Brunei, Taiwan and Malaysia also lay claim to parts, making the row one of the biggest security threats in the region.

The area is thought to hold vast, untapped reserves of oil and natural gas that could potentially place China, the Philippines, Vietnam and other claimant nations alongside the likes of Saudi Arabia, Russia and Qatar.

Sino-Japanese relations are also under strain after the Japanese government bought disputed islands known as Senkaku in Japan and Diaoyu in China from a private Japanese owner in September, triggering violent protests and calls for boycotts of Japanese products across China.

China says both disputes involve sea-lanes vital for its economy and prefers to address conflicts through one-on-one talks. But the subject is expected to feature later on Tuesday at the East Asia Summit, which also includes leaders from ASEAN, India, South Korea, Australia and New Zealand.

ASEAN includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

"HOW CAN THERE BE A CONSENSUS?"

On Monday, Noda challenged efforts by summit host Cambodia, a staunch China ally, to limit discussions on the South China Sea. Cambodia had said Southeast Asian leaders had agreed not to internationalise the row -- a claim that was strongly disputed by Philippine President Benigno Aquino.

"How can there be a consensus? A consensus means 100 percent," said Philippine Foreign Minister Albert del Rosario. "It was translated into a consensus without our consent."

Aquino raised the possibility of finding an "alternative route" to discuss the issue with countries outside the 10-member ASEAN. That would likely involve the United States, one of its closest allies, which has said it has a national interest in freedom of navigation through the South China Sea.

ASEAN on Sunday agreed to formally ask China to start talks on a Code of Conduct (CoC) aimed at easing the risk of naval flashpoints, according to Surin. But Wen played down the need for urgent action in talks on Sunday night with Cambodian Prime Minister Hun Sen.

Late on Monday, Obama and Southeast Asian leaders launched a trade initiative known as the U.S.-ASEAN Expanded Economic Engagement, which is aimed at smoothing a path for Asian nations to link up with the Trans-Pacific Partnership, a pact the United States is negotiating with 10 Asian countries and the Western Hemisphere, the White House said.

The Trans-Pacific Partnership excludes China until it undertakes significant economic reforms.