The futility of US designs

Updated: 2013-05-27 07:10

By Jin Baisong (China Daily)

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After being sworn in for his term as US president amid the threat of a national economic collapse, Barack Obama laid out new strategies for development, including doubling US exports in five years. To achieve its goals, the US revitalized its manufacturing industry and expanded its export avenues. And with the Doha Round of trade talks remaining inconclusive even after 10 years, the US proposed Trans-Pacific Partnership to promote regional trade liberalization and seek development opportunities.

As secretary of state during Obama's first term as president, Hillary Clinton tried to sign free trade agreements and promote TPP talks with the US' Asian partners by initiating the "pivot to Asia" policy, which seemingly is aimed at containing China.

A development in 2012, however, indicated a shift in US policy. The Regional Comprehensive Economic Partnership launched last year has - apart from the 10 ASEAN states - China, Japan, the Republic of Korea, Australia, New Zealand and India as its members. In geo-economics terms, the US cannot be part of the RCEP. And in terms of strategy, the RCEP is supposed to be a "counterbalance" to the US. This prompted Clinton to announce that China, too, was welcomed to TPP talks, signifying the US' policy shift.

During his second term, Obama has secretary of state John Kerry, who has demonstrated his diplomatic prowess through his policies. During his first overseas trip as US secretary of state, Kerry pursued broader cooperation with European countries by establishing the "Transatlantic Trade and Investment Partnership", which is aimed at strengthening rules-based trading system across the world. The European Union, as the world's largest market, and the US, as the world's largest economy, account for more than half of the global economy, and deeper relations between the two can change the rules of the economics game.

Besides, the US has invited Japan to the TPP talks. And, inspired by the US' TTIP, Japan has presented plans to the EU for deeper cooperation in trade and investment.

According to the Financial Times, Kerry's approach to the TTIP and the TPP reflects the new strategy of the Obama administration to deal with China, the world's largest exporter of manufactured products. This US' new approach to trade is characterized by the Financial Times as "ABC - Anyone But China". Speaking of strengthening US-EU trade, an aide to a leading Republican senator said "this is very much part of our China strategy", according to the Financial Times.

But Robert Zoellick, former US deputy secretary of state, holds a different view. He says all TPP members will benefit from China's growth, and actions to isolate China will inevitably fail.

The problem is that the part of Washington's strategy that US-EU trade pacts and the TPP reveal may appear competitive, even harmless, when its overall strategy is to "divide and conquer", as described in Sun Tzu's The Art of War.

During the past Doha Round of trade talks, the US played a key role in either making concessions or taking the final decision. But the Doha Round of talks now seem to have hit a dead end as more countries - such as China, India, Brazil the ROK and South Africa - hold the bargaining chips.

In the TPP negotiations, however, the US is confident of achieving its objectives with the main negotiators being Japan and Canada. Negotiations with EU member states, too, seem promising for the US. Following these talks, the US will presumably start separate negotiations with China and invite it to join the TPP.

It is also possible that the US will invite India to the TPP fold and Russia to be part of the TTIP, and take measures to strengthen free trade agreements in the Americas in order to achieve its goals one by one. But the US strategy, be it led by Clinton or Kerry, should not be over-interpreted, because globalization is such an irreversible trend that no country can go against it.

Globalization will ultimately lead to a phase of "super-sovereign" era when major powers will come together to solve regional and international problems for the benefit of all concerned and help establish a global order of equality and fairness.

The author is a researcher at Chinese Academy of International Trade and Economic Cooperation.

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