The Road to War: The Trans-Pacific Partnership

In a continuation of my Road to War series, I turn to the Trans-Pacific Partnership, the trade deal recently struck (but not yet ratified and executed) by the United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.  Much has been written about how this deal will (or will not) benefit the participants, but that is not the focus of this post.  Instead, we turn to the strategic aspect of the TTP, and try to answer the question: is the TPP intended to contain China, or is it simply the extension of the Washington Consensus that drives the world towards greater openness and trade.

Revisiting my previous post, America's Grand Strategy Towards China, we see a Cold War 2.0 worldview, with China forcefully building its sphere of influence in Asia, countered by an American-led network of opposing states:

As Edward Luttwak has argued, others will – indeed must, by "logic of strategy" – react by balancing. Holslag foresees a bipolar Asia as a real possibility, with the Sinosphere surrounded by a rimland of littoral states in loose alliance.

If so, the organizing architect will be Washington. Perhaps the Americans are slowly awakening to this prospect, forced to completely modify their self-image as Asia's unique protector, and forced to recalibrate their relationships and ambitions in the region. 

In this view, the TPP is one more element in America's "pivot to Asia" and an attempt to contain China through exclusive trade links and new security alliances, such as the Quadrilateral Security Dialogue.  In this version of the narrative, China is countering America's strategy through the Asian Infrastructure Investment Bank to finance the One Belt, One Road infrastructure network in Asia; the Shanghai Cooperation Organization to tighten security coordination with select neighbors; and promotion of the Regional Comprehensive Economic Partnership or the Free Trade Area of the Asia Pacific to directly counter the TPP.

Opposing this dark interpretation of the TPP are those who say that not only is TPP little more than a trade pact, but it has been explicitly stated that China is welcome to join in the future.  Here is "Patrick O'Connor" (a pseudonym, apparently), writing at the Center for Strategic and International Studies:

 

Some scholars have suggested that the Trans-Pacific Partnership’s (TPP’s) raison d’être is containment and isolation of China and that the agreement is all about geopolitical victories. This proposition is dangerous because it seeks to divide rather than unite. Moreover, it is false.

The first argument against this view is that US officials at various levels have raised the possibility of China becoming a party to the agreement. In 2012 in Singapore, then Secretary of State Hillary Clinton said “[the United States welcomes] the interest of any nation willing to meet the 21st century standards of the TPP – including China.”

In March 2013, then acting US Trade Representative Demetrios Marantis made similar remarks and said the TPP was “not an exclusive club,” but aimed to increase integration in the Asia-Pacific. Even now, a number of Asia-Pacific countries and economies are considering whether they should seek admission, including Indonesia, South Korea, Thailand, Taiwan, Malaysia, and the Philippines. Chinese officials have in the past indicated their willingness to at least consider the merits of joining.

Second, rather than being barred by political obstruction, China has probably been prevented by its inability to meet the exacting standards required of the TPP, the most ambitious and comprehensive FTA yet negotiated. It’s not just concerned with tariffs and quotas; it also attempts to provide a more level playing field for regional trade by developing common, high standards on a range of negotiating areas. These include government procurement, competition policy, intellectual property rights, state-owned enterprises, e-commerce, labor rights, and environmental protection, among others.

Third, there is the argument that the Regional Comprehensive Economic Partnership (RCEP) is a Chinese-led FTA and the TPP is a US-led FTA, and they are competing geopolitical tools. This belittles the leadership and importance of each of the other members of those agreements. It also overlooks the history of their development. The TPP was born out of the P4 (Singapore, Brunei, Chile, New Zealand) when those members started to broaden their agreement. It remains open in-principle to new members.

It's a strong argument, especially in light of the frustration created by the failure of the Doha round of negotiations, which has been going on since November 2001, with no end in sight (thanks, India).  The thought process behind TPP and the US-European counterpart, TTIP, was that ambitious, global trade deals could no longer be concluded due to the disparate interests of a too-diverse set of negotiating parties, and thus the global WTO-led deals would be replaced with mega-regional deals like the TPP and TTIP.  Therefore, China wasn't excluded as a strategic move, but instead as an expedient one to ensure that a trade deal could be concluded.  China and the developed countries (the US, Japan, Australia, Canada, etc.) are too far apart on important matters like intellectual property and labor rights, so including China in the negotiations would have been counter-productive.

Moreover, most of the participants in the TPP are heavily dependent on trade with China, so any attempt to drive a wedge between the TPP members would be futile and counter-productive.  

The truth behind TPP's purpose probably lies somewhere in-between the two extremes.  As a trade deal, it doesn't do very much for the United States in terms of quantifiable economic growth, but it does advance American standards in intellectual property rights, labor rights, environmental regulation, etc.  It also binds the US to the Asia-Pacific in a time when China is assuming a larger role in the region and tensions are rising over the South China Sea.  That said, China's stated goals are to realign its own economy in preparation for the next, higher value-added stage of growth, and thus its own reforms may also prepare it for membership in the TPP at some point.

Let's hope the United States is able to ratify the TPP agreement so we can put these arguments to the test.

 

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