Obama Tries To Reassure World Leaders On Trade Ahead Of Trump Presidency

With the future of U.S. trade deals in flux under President-elect Trump, Financial Times reporter Shawn Donnon discusses President Obama's meetings with world leaders at an economic summit in Peru.

MICHEL MARTIN, HOST:

We'll start the program today in Lima, Peru, where President Obama and some 20 other world leaders have gathered this weekend to talk about trade throughout Asia and the Pacific. It's the meeting of the Asia-Pacific Economic Cooperation Group. It's likely President Obama's last international trip as president and the first big discussion of trade since the election of Donald Trump as president, who has promised to pull out of major trade deals. Now world leaders are also trying to figure out the way forward for the largest ever U.S. proposed trade deal, the Trans-Pacific Partnership, or TPP, which aimed to open up markets between the U.S., Canada and 10 other Pacific and Asian nations other than China.

To find out more about the summit, we reached Financial Times world trade editor Shawn Donnan, who is in Lima covering the summit. Shawn, thanks so much for joining us.

SHAWN DONNAN: Thanks for having me.

MARTIN: Well, you know, obviously these meetings are planned well in advance. But in the wake of the election of someone with such a diametrically different view of policy, what's the goal of these talks both for President Obama and other nations?

DONNAN: APEC is an organization that's all about economic integration. It's all about trade. It's all about lowering trade barriers. And clearly, when you have Donald Trump, someone who ran on a platform that was about ripping up trade agreements, about pulling the U.S. out of this agreement that President Obama has spent so many years negotiating, the Trans-Pacific Partnership, there's a feeling that there is potentially a real big change on the horizon, that the U.S. may be moving towards a more protectionist stance towards some of its Asian trading partners.

We're also seeing a kind of rebalancing at the table, if you will. Traditionally, the U.S. has really been the leading power in the room when they have gathered for these summits, and this time around there's a lot of people looking to China and to President Xi Jinping for leadership. And he, on Saturday, gave this pretty extraordinary speech where basically he said, hey, you know the big advocate of free trade in the world? Well, that's us now. That's China.

MARTIN: How was that received?

DONNAN: I mean, he drew two standing ovations. He drew great cheers in the room. The audience here, these are really the advocates of free trade in the world. These are countries like China, countries like Indonesia, Canada, Mexico that really feel that they've done very well from trade over the years in trade agreements. And so they're gathered this morning and they're trying to figure out what it is that they're seeing in the West. This wave of anti-globalization that you saw that helped elect Donald Trump, they're trying to figure out how that is upending things.

MARTIN: As we mentioned, the Trans-Pacific Partnership would be between the U.S., Canada and 10 other Pacific and Asian nations. China is not currently included in that. Was there any discussion about how this could go forward without the U.S.?

DONNAN: Absolutely. The other countries that are involved in the TPP have been talking for a few days now about how they might reconstitute this thing. Malcolm Turnbull, the Australian prime minister, saying, look, we're still committed to this thing. This is still important to us. If the U.S. can't be part of it then we're going to try and find a way to make sure that it goes ahead. Likewise Pena Nieto, the Mexican president. We expect to hear the same thing from Justin Trudeau, the Canadian prime minister.

On the other hand, there's a rival trade agreement on the table, something called the Regional Comprehensive Economic Partnership which China is leading that has 16 countries in it, including at least seven TPP countries. And China's saying, well, you know what? If the U.S. isn't ready to sign this TPP, come over here and have a look. And we're starting to hear countries in Latin America like Peru and Chile and others say, well, maybe we'll take a look at joining that.

MARTIN: That was Financial Times world trade editor Shawn Donnan reporting from Lima. Shawn, thanks so much for speaking with us.

DONNAN: Thanks for having me.

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