Joining TPP best answer for worries of further US encirclement

Global Times | 2013-4-8 20:53:01

Joining TPP best answer for worries of further US encirclement

By Chris Dalby

It is easy to perceive why China is highly apprehensive at the thought of Japan joining the Trans-Pacific Partnership (TPP). This move fits into a complex pattern that has fed China’s paranoia about being encircled.

Should the TPP finally exit its four-year negotiation torpor and progress, it will include China’s main rival, the US, and powerhouses with whom China is already at odds such as Australia and Mexico.

It could also undermine China’s pretensions to being the uncontested economic trend-setter in Asia, as Malaysia and Vietnam will be joining. Japan’s addition to this list will confirm the fears of China’s hawks.

Although the US has naturally risen to the fore due to its heavyweight status, it is worthwhile reminding China that the TPP was not a US invention. Indeed, it is simply an evolution of the Trans-Pacific Strategic Economic Partnership Agreement signed in 2005 between Brunei, Chile, Singapore and New Zealand after being pushed by the latter. It didn’t even involve the US and posed no threat to China, unless Wellington has very effectively masked its Machiavellian skills.

The inclusion of Japan into the TPP lends it major significance and may even overcome South Korea’s concerns, allowing Seoul to join as well.

Many articles have been written in Chinese media about the dangers facing Japan if it joins the TPP. These writers have tried to appear concerned about Japan’s fate, casting it as a weak and compliant victim being strung along by the US and unable to see the economic dangers the TPP would expose it to.

As the US does not have a free trade agreement with Japan, the TPP would open Japanese markets to US goods in an unprecedented way. Japanese Prime Minister Shinzo Abe knows that he is supporting the TPP over the concerns of key industries, including agriculture and healthcare.

But Abe is aware that the Japanese economy has been stuck in a rut for far too long, with little traction to get it moving again. He is likely gambling on the TPP helping to force Japan. In a new economic direction, even if some powerhouses grind to a halt momentarily.

As for China’s accusations, it is certain that the US will ensure the TPP reflects its major concerns.

Environmental standards, IPR protection and an end to subsidies to state-owned enterprises (SOEs) are conditions that the US lobbied for in order to level the playing field. In China, this has been taken as proof that the US is seeking to use the TPP to kill off China’s competitive advantages by setting up standards China cannot meet.

However, if we drop the veil of suspicion, many prerequisites to joining the TPP are moves that China will have to take anyway, sooner or later.

Top Party leaders have spoken out on the need to make SOEs obey market conditions and stop relying on subsidies, a casual glance at Beijing’s skies hammers home the need for China to get to grips with environmental standards and the government has already begun toeing the line more closely on IPR theft.

China has been banking on the success of the Regional Comprehensive Economic Partnership (RCEP), which aims to bring together ASEAN nations, South Korea, Japan, India, Australia and New Zealand.

But the fact that the RCEP would contain countries belonging to both sides weakens its validity as a counterpoint to the TPP.

China has been gunning for a seat at the grown-ups table on international policymaking, on tariff reductions and on anti-dumping investigations.

Instead of lamenting about finding itself "surrounded" by the TPP, joining it and influencing the course of this landmark free trade agreement from the inside would be a much wiser course of action.

The author is an editor with the Global Times. opinion@globaltimes.com.“cn

source: Global Times