By Etienne Murgues
Concepts & Thoughts
Toronto, Ontario—The Trans-Pacific Partnership (TPP) is a regional Free Trade Agreement (FTA) introduced as the biggest multilateral trade agreement ever reached. It includes the United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. This is a high standard FTA that aims to liberalize goods and services beyond what the World Trade Organization had envisioned with the Doha Round of talks.
This FTA is regarded as an economic achievement for all the signatories; however, this could mean more for the United States’ administration. Determined to sustain its leadership in the Asia-Pacific, President Barack Obama in recent years launched a shift towards the region by increasing the U.S. military involvement, reinforcing diplomatic relations and signing new economic agreements such as the TPP. This could be seen as a way to assert American influence in the region and contain Chinese in its own backyard
U.S.-China relationship in the Asia-Pacific region
The Asia-Pacific is of great strategic and economic interest to the U.S., and China understandably feels threatened by American involvement in the region. The maritime dispute is obviously the most mediatized issue between China and its neighbours, and this issue has displayed a more forceful China when it comes to territorial disputes. The U.S. has utilized the South China Sea dispute as a pretext to assert itself as the guardian of regional order and to portray China as the adversary. China believes that the US is trying to undermine it by hindering its development through economic and military encirclement
Under the Obama administration, the much ballyhooed pivot to Asia was launched which encouraged increased U.S. military presence in the Pacific. The U.S. signed a ten-year defence agreement with the Philippines; deployed Marines and aircraft in Darwin, Australia; restated its strategic agreement with Japan. 60% of U.S. navy assets are now assigned to the Pacific Ocean. Though the shift is not militarily focused (deployment of armed forces in the region is minimal), this type of resource allocation by the U.S. has not been welcomed by China.
The economic interdependence between both countries has actually worked against taking a bolder diplomatic stand and harsher military positioning. Additionally, China is the leading trading partner in the region with growing economic and diplomatic ties with regional states with increased military capacity. This has made it hard for countries in the region to take a side. Though many welcome the U.S. involvement in balancing Chinese power, their dependence on China is often too strong to act against. It is based on these merits that constructive engagement remains in the interest of both countries to maintain security in Asia-Pacific.
The TPP could be seen as a way to toughen the U.S. containment strategy as it purposely excluded China from one of the biggest trade agreements ever reached. With the second largest economy in the world, snubbing China shows that they are indeed the biggest losers in this agreement, particularly when partner countries include four different continents and ASEAN states that fall within China’s sphere of influence. Improving relations between the U.S. and ASEAN countries is viewed as interfering with China’s regional policies.
China’s response to containment
China’s objective for increasing its presence on the regional and international scene has allowed its to strategically foster ties with its neighbours in the Asia-Pacific region. By taking on more responsibilities, China is displaying itself as a key actor in the international arena and demonstrates an effective counterbalance to U.S. containment strategy. One of China’s strategies is to exclude U.S. participation in regional talks and agreements. The Regional Comprehensive Economic Partnership (RCEP) negotiation is just one example, which involves ASEAN countries plus China, Japan, South Korea, New Zealand, Australia, and India. These talks aim to counterbalance the U.S. in the region, and by extension, the TPP.
China has forged a number of partnerships and agreements in the region, but also launched its own initiatives. The New Silk Roads that include the Silk Road Economic Belt and Maritime Silk Road was launched by Chinese President Xi Jinping, which he introduced during a visit to Kazakhstan. The new Maritime Silk Road will link China to South Asia, East Africa and Europe, while the Silk Road Economic Belt will run through China, Central Asia, the Middle East, Russia and Europe. These projects will strengthen the link with its neighbours, provide a better access to the sea, and improve Asia-Europe connectivity.
China launched another project, a ‘multilateral development bank’ known as the Asian Infrastructure Investment Bank (AIIB). The AIIB is considered as a leading alternative contender to the World Bank, International Monetary Fund (IMF) or Asian Development Bank (ADB). AIIB was proposed after considerations that the World Bank, the IMF and the ADB were not meeting the growing needs of China’s infrastructure investment, in addition to the fact that these international institutions were shaped by the United States.
The U.S., Canada, and Japan have specifically chosen not to participate in the AIIB as they do not believe that the AIIB will have transparent governance. They also fear that most of the projects will be China-centric. Despite their positions, key NATO partners such as the United Kingdom, France, and Germany have joined the AIIB, a snub in its own right to American containment strategy. These European states see China as a strong economic and financial power and seek involvement in its regional and international development. The AIIB is certainly one of the mechanisms designed to leverage U.S. power in Asia.
Partnership or confrontation?
If the U.S. continues to move forward with its containment strategy, not only will it damage its diplomatic relations, but also small disputes between the two countries could snowball to a point of confrontation if no attempt is made at resolving them. At the same time, China must be more transparent in the way it operates in global affairs.
For China, a hegemonic strategy is not realistic and the U.S. will not be able to contain it. The classic Cold War containment strategy worked for Russia because at the time, the U.S. and Russia were only competing on a military level. China’s case is more complicated. If the U.S. wants to contain China’s growth, the U.S. should mix a military containment strategy with high-level economic negotiations.
A potential conflict between the two countries would drastically alter the world economy and regional/world order. China has demonstrated its strength and regional involvement by participating in agreements, building regional and international organizations, and by creating new Institutions and projects such as the New Silk Roads and the AIIB. The U.S. and China should remain cautious in demonstrating too much military prowess because it could lead to catastrophe.
Both countries should instead focus on partnerships and involvement. Will China join the TPP agreement in the near future or should other bilateral talks take place to strengthen economic integration? Going forward, China’s involvement in the TPP seems to be inevitable even if takes a couple of years to materialize.
Etienne Murgues is a project manager specializing in innovative and entrepreneurial solutions for social and political improvement at the domestic and international levels. He is currently working on a project for a NGO in Papua New Guinea as part of the United Nations Volunteers program. Etienne has worked on various development projects for local and international organizations.