China’s Influence Grows in Ashes of Trans-Pacific Trade Pact
A toxic political war over money, jobs and globalization killed the vast and complex trade deal that was supposed to be a signature legacy of President Obama. But the deal, between the United States and 11 Asian and Pacific nations, was never just about trade.
The agreement, the Trans-Pacific Partnership, was conceived as a vital move in the increasingly tense chess match between China and the United States for economic and military influence in the fastest-growing and most strategically uncertain part of the world. The deal, which excluded China, was intended to give those 11 nations more leverage in that strained match by providing them with a viable economic alternative. And its defeat is an unalloyed triumph for China, the country that President-elect Donald J. Trump castigated repeatedly over trade…
Much of Asia has for decades quietly accepted American security guarantees while also running large trade surpluses with the United States, turning them into prosperous manufacturing powerhouses. But China is now the largest trading partner for most of the region, while at the same time making territorial claims against many of its neighbors [see e.g. the South China Sea].
The neighbors fear they could soon face a stark choice among money, pride and place: Accede to China’s security demands, or lose access to China’s vast market…
Just three days before Mr. Obama’s arrival here, Peru’s foreign minister, Eduardo Ferreyros, said the country still hoped the Pacific pact would someday become a reality. But given the changing dynamics, his government also opened talks this autumn with Beijing to join the rival, Chinese-led trade pact, the Regional Comprehensive Economic Partnership.
“Since Mr. Trump is not so interested in requiring economic integration and trade liberalization, why not have other countries follow this free-trade proposal?” asked Song Guoyou, a longtime trade specialist who is the deputy director of the Center for American Studies at Fudan University in Shanghai.
Since the election, Australia’s government has also called for rapid progress in concluding that rival trade pact. Even Japan, despite facing territorial demands from China and close, but peaceful, confrontations between the two countries’ military jets and coast guard vessels, is paying more attention to China’s vision for global trade [note also Japan’s military build-up].
Australia and Japan have been bargaining for years with China on the deal. But they wanted it as a complement to the Trans-Pacific Partnership, to balance their economic relationship with the United States instead of replacing it with ties to China.
“If T.P.P. doesn’t move forward, there’s no doubt that the focus will shift” to the China-led deal, Prime Minister Shinzo Abe of Japan told his country’s Parliament on Tuesday [Nov. 15, emphasis added] . Mr. Abe met with Mr. Trump on Thursday.
Since 2011, trade negotiators from China, Japan, Australia, India and 12 other Asian nations have been meeting several times a year to stitch together the Regional Comprehensive Economic Partnership [more here]. And with Mr. Trump’s victory, those efforts are almost certain to accelerate. The next round of talks is to be held in Indonesia early next month [emphasis added].
Trade officials across Asia met to negotiate details in Cebu, the Philippines, the week before Mr. Trump won the election. Almost no one noticed outside of Cebu. The next meeting, scheduled for early December, could attract far more attention, including some at this weekend’s Asia-Pacific Economic Cooperation summit meeting in Lima…
Oh, that cuddly panda. But consider: