TPP is politics by other means
19 Apr 2013|

U.S. Ambassador to Japan John V. Roos shakes hands with Japanese Prime Minister Shinzo Abe in Tokyo, Japan, on April 5, 2013.Mark’s explanation of what is complex terrain is pithy. Asia has two free trade agreements, one championed by the US at the expense of China (TPP), and one via ASEAN which includes China but not the US (RCEP). He writes that whatever the sense of competition between them, neither will do structural harm to the economic interests of the other. So, we should be intolerant of any attempt at a veto of the respective agreements—no state should be allowed to inhibit the trade liberalisation of another.

But I think that while the intended consequence of the TPP is economic, its primary effect is political. Any ‘veto’ which would be exercised by China may have trade casualties, but it would have a political target. This is an area of politics which will directly affect China’s capacity to pursue core interests of all sorts—because the TPP looks very much like a containment mechanism, particularly now Japan is a part.

If the TPP is seen by China as a containment mechanism, then the partnership’s negative impact on stability in Asia will outweigh the economic benefits we could expect to see. After all, the TPP may help economically, but it is hardly a structural change. And Asia’s economic success is built mainly on several decades of stability—continued stability will be more important for growth than the liberalisation generated through the TPP.

It also doesn’t matter much whether the RCEP materialises or not. This question is about how threatened China feels, and how it may respond as a result. The TPP and RCEP aren’t in competition, because the important element isn’t economics; and the US would hardly feel threatened by the RCEP (although it may feel a certain concern at China’s growing influence).

If the message out of Washington is economic, it should either pursue growth another way, or seriously and fervently seek to include China. If the move is strategic, then Beijing’s suspicion is confirmed, and it is hard to begrudge them any attempt at a veto. Contrary to Mark’s post, it’s going to be increasingly difficult to find competition that is anything other than bad on the present tack—that is while the world’s two largest economies see success for the other as a loss for themselves.

Harry White is an analyst at ASPI. Image courtesy of Wikimedia Commons.