Observers split on TPP's aims toward China
Updated: 2013-05-29 10:32
By Joseph Boris in Washington (China Daily)
A proposed oceanic free-trade zone involving the United States and other countries with a Pacific coast has stirred debate over what it means that China isn't part of the negotiations.
The 17th round of talks toward establishing the Trans-Pacific Partnership, or TPP, concluded on Friday in Peru. Because the discussions have been secret, it's unclear where the planned agreement now stands.
One bit of news that did emerge from chief negotiators in the Peruvian capital, Lima, is that adding Japan as the 12th TPP member won't delay plans to finalize a pact later this year. Japan, whose April request to join the talks was granted, is expected to begin participating as a negotiator at the next round of TPP talks, in Malaysia from July 15 to 24.
Some observers believe that a trade pact that involves the world's biggest and third-biggest economies - the US and Japan - but not China, at No 2, is a deliberate snub.
"No one will say it out loud, but the unstated aim of the TPP is to create a 'high level' trade agreement that excludes the world's second-biggest economy," Financial Times columnist David Pilling wrote last week. "That's a big club to be barred to Chinese entry," he added, noting that with Japan in the mix the TPP would account for almost 40 percent of annual global GDP and a third of world trade.
Pilling believes one motive behind the TPP is to turn back the clock to trade policies that existed before China's 2001 accession to the World Trade Organization. "The view that China is a freeloader and a cheat rather ignores the fact that today's advanced economies - including Britain, the US and Japan - all pursued rampantly mercantilist policies during their take-off phases. But there you have it," he wrote.
The second motive, as the columnist sees it, is to create a trading bloc "so powerful and attractive that China will feel obliged to mend its errant ways in order to join". He also considers the TPP "at least partly a political project", an "anyone-but-China club" that Japan in particular welcomes.
Trade officials from the US, Japan and other TPP countries have said that while an invitation to China to join the bloc hasn't been ruled out, Beijing would have to first enact numerous economic reforms.
Chinese officials have mostly criticized the TPP as an effort to contain their country economically. As those talks continue, China and 15 other nations are negotiating a free-trade pact under the auspices of the Association of Southeast Asian Nations. It's also in three-way trade talks with Japan and the Republic of Korea.
However, China's view of the TPP has begun to expand, according to Zhang Jianping, a senior researcher at the Institute for International Economic Research under the policy-planning National Development and Research Commission. Zhang recently told China Daily that those who consider the US-led pact a move to contain China are "narrow-minded" and that China shouldn't fear the TPP. Ultimately, China and the US will work out terms of their trade relationship bilaterally, he said.
Pilling's stance drew a rebuke from Mireya Solis, an associate professor at Washington's American University and a researcher on the Japanese economy at the Brookings Institution. She wrote on the think tank's website that the TPP is by no means an anti-China club.
China, like any other economy in the region, "has the right to request entry into the TPP", she said. "Whether the Chinese leadership will judge TPP membership to be in their country's national interest and whether TPP members can be persuaded that China is prepared to abide by the negotiated disciplines is a separate matter.
"It is hard to understand why TPP countries would pursue the counterproductive and unfeasible goal of marginalizing China," Solis wrote in her blog post, noting the country's economic might and central role in global supply chains. "A trade agreement that by fiat sought to defy these fundamental economic realities would be foolhardy indeed." She called the TPP an "expansive" project that aims to create a broad regional platform for economic integration, "not to draw lines encircling China".
Solis questioned the notion of the TPP as anti-China given Japan's concurrent talks, with China, toward both the trilateral pact with South Korea and the ASEAN-backed Regional Comprehensive Economic Partnership.
"Ascribing an anti-China objective to the TPP is not helpful" for three main reasons, she wrote: It gives "political cover to protectionist interests"; sends "a chilling message to prospective members, who may fear that in joining TPP they will be seen as enlisted in the anti-China camp"; and discourages China from "finding points of convergence with the TPP agenda if this is seen as capitulating to an American strategy of containment".
Robert Zoellick, a former US trade representative who in 2012 completed a five-year term as World Bank president, also sees no anti-China imperative behind the talks.
"There are worries that the TPP is being seen as containment of China. But I say that's illogical because China is so integrated into East Asia," he told China Daily in Shanghai over the weekend.
(China Daily USA 05/29/2013 page2)