Saturday April 29, 2017

PRESIDENT OBAMA PLAYS CHINA CARD TO ADVOCATE TPP IN  CONGRESS

May 1, 2015

Credit: China Daily

Credit: China Daily

President Obama has highlighted China’s rising authority in Asia in the hopes of persuading Congress to give him fast-track authority (FTA) for trade agreements related to the Trans-Pacific Partnership (TPP), which would put a deal to a vote without allowing amendments. At this time,  the United States already has free trade agreements with half the countries in the TPP, but a deal with Japan is still under hard negotiation.  Japanese Prime Minister Shinzo Abe discussed the pact in Washington and addressed a joint meeting of Congress earlier this week.

“If we don’t write the rules, China will write the rules out in that region,” Mr. Obama said in an interview Monday with The Wall Street Journal. “We will be shut out—American businesses and American agriculture. That will mean a loss of U.S. jobs.” The President made this statement in response to continued opposition from Democrats on the trade deal.

The left-most Democrats are opposing the TPP because they worry that free-trade agreements may cause an outflow of manufacturing jobs from the U.S. to other countries; they say competition from lower-wage countries produced by such agreements has already contributed to stagnant wages and higher income inequality in the U.S. More importantly, congressional leaders – normally in favor of such agreements – have withheld  their support on the fast-track  because they see the TPP architecture as a geopolitical tactic rather than a method of creating economic links with the U.S. allies like Japan. According to a New York Times report, Senator Charles E. Schumer of New York said, “When the administration sells me on this, it’s all geopolitics, not economics: We want to keep these countries in our orbit, not China’s. I agree with that. But I need to be sold on the economics.”

Senator Schumer’s concern is confirmed by Japanese Prime Minister Abe’s state visit and its focuson the trade talks. Japan is one of the most important U.S. allies in East Asia, which has territorial disputes, historical conflicts, and economic competition with China. The Obama-Abe meeting didn’t get the deal done, but it did achieve significant progress on the TPP. “The politics around trade can be hard in both our countries, but I know that Prime Minister Abe, like me, is deeply committed to getting this done, and I’m confident we will,” Mr. Obama said during a news conference with Mr. Abe in the Rose Garden. The trade talks do put China in the spotlight since both countries are using their economic ties to balance China’s rising economic authority in Asia. It is notable that the  Obama-Abe trade talk is occurring now, after the U.S. and Japan refused to be  among the founding members of the China-led Asia Infrastructure Investment Bank (AIIB).

Even as the Obama Administration, Congress, and Japan put so much weight  on China, China has shown little concern in return. Why Beijing is so cool on  being excluded from the global trade system? Firstly, rather than participating a new global trade pact, which requires  domestic reforms in order to meet the higher standards, China has its own agenda to establish regional economic initiatives. This includes implementing the newly established AIIB, pushing forward ASEAN plus Six (Regional Comprehensive Economic Partnership, RCEP, a China-led counterpart to U.S.-led TPP), and promoting the Road and Belt strategy. Within the regional economic structure, China has more leverage and authority to set up rules that favor China’s economic interests.

Secondly, China is unwilling to join in the TPP in a hurry. China joined in the World Trade Organization (WTO) in 2001 as a developing country, which means that China can implement high tariffs and other import restrictions to protect its developing market economy, agricultural products, and manufacturing industry. Given that the broad purpose of the TPP is to reduce barriers to free trade between member countries, if China participates in the TPP, which requires lower tariff rates, it will hurt the country’s already-slowing  economic growth.

Thirdly, China’s growing confidence makes China view the TPP as an opportunity rather than a challenge. In October, Zhu Guangyao, a vice finance minister, said that the pact would be “incomplete” without China,  showing China’s confidence that is will in fact become a TPP member state in the future . Yang Bojiang, deputy director of the Institute of Japanese Studies under the Chinese Academy of Social Sciences, said “The US is trying to tie Japan tightly to its future strategies. … Also, China’s latest strategic proposals with regional influence — including the Asian Infrastructure Investment Bank—have impressed Washington.”

Between the Obama Administration’s eagerness to obtain fast-track authority , Congress’ concern over mixing geopolitics and trade, and the increasing U.S.-Japan alliance, the “China card” has been played by all parties, depicting China as an adversary  in international community. If TPP negotiations succeed, it will be interesting to see how trans-Pacific relations proceed.

For more information on this topic, consult the following sources:

The Wall Street Journal“Obama Presses Case for Asia Trade Deal, Warns Failure Would Benefit China”

The Wall Street Journal “China on My Mind: U.S.-Japan Visit Mostly About Beijing, State Media Says”

The White House Blog“Bringing Trade Agreements into the 21st Century”

Forbes “Obama is Right on the Trans-Pacific Partnership”

The New York Times“Obama and Republicans Agree on the Trans-Pacific Partnership … Unfortunately”

The New York Times “Once Concerned, China Is Quiet About Trans-Pacific Trade Deal”

The New York Times“No Deal, but Progress on Trans-Pacific Trade, Obama and Shinzo Abe Say After Meeting”

The National Interest“Weaponized: The “China Card” Makes Its Return to U.S. Politics”

The Diplomat“Will Congress Kill the ‘Rebalance to Asia’?”

News Week“The Trans-Pacific Partnership: An Alliance of Money Over Guns”

The Huffington Post“A Look at the Fast-Track Bill Shows It’s the Wrong Thing to Do”

The Huffington Post“‘Globalization and Its Discontents'”

Foreign Policy “Where Do We Draw the Line on Balancing China?”

China Daily“China hits out as Abe visits the US”

德国之声中文网“奥巴马:美日牢固关系并非挑衅中国”

新华网“协议条款存分歧 安倍访美恐难给TPP谈判画句号”

人民网“安倍访美将晤奥巴马 双方敲定TPP或遇美国会阻挠”

聯合新聞網“白宮:安倍訪美難打破美日TPP談判僵局”

Compiled and edited by Stella Ran Zheng