As Congress decides whether to grant trade promotion authority (TPA), which would formally allow U.S. President Barack Obama to negotiate the Trans-Pacific Partnership (TPP), the surrounding debate reveals much about attitudes toward economic globalization and, in particular, toward China’s rising clout in the international economy. It reflects a broader misconception among many lawmakers, who embrace the outdated notion that economic relations constitute a zero-sum game, according to which excluding China from multilateral trade deals and international institutions is in America’s interest.
In a speech at Nike’s headquarters to promote the TPP, Obama recently claimed that if the U.S. does not write the rules of trade around the world, China will. Yet a strategy toward China that fails to adequately include the country would actually diminish America’s ability to do just that. China’s decision to try and set up its own institutions that run parallel to the established system, such as the recent Asian Infrastructure Investment Bank (AIIB), is a predictable reaction to these perceived injustices. If the United States really wants China to become a “responsible stakeholder” in the global economic order, it must engage with China to let it become a serious shareholder as well.
If successfully concluded, TPP will be one of the world’s largest trade deals, including 12 of the most important Pacific rim economies other than China. Policymakers in Washington rarely try to hide the fact that TPP is a tool for reassuring allies of the United States’ preeminence in the region as part of the “pivot to Asia.” However, instead of preventing China from writing the rules of trade, TPP may provide China with a convenient excuse to further push regional trade deals such as the Regional Comprehensive Economic Partnership (RCEP), a proposed ASEAN-led trade block that does not include the United States. As a result, the U.S. would have no influence over trade standards in these parallel trade agreements and over China’s future trade endeavors.
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