Guiding questions:
Why has China changed its initial suspicious attitude to a more neutral stance toward the TPP recently?
What are the short-term and long-term effects of the TPP on China’s economic growth and geopolitical influence?
How will China deal with a myriad of challenges posed by the TPP going forward, be in it or outside the TPP?
Each part should take 3.5 minutes
Parts:
- Introduction: What is the TPP (Trans-Pacific Partnership)? Conceptualizing Claudia
- Interest for the US to turn more toward Asia
- The article is written in 2015 → how it is today
- Ways they view the TPP
- China → (as a wing for American political influence, etc.)
- US → containment strategy, no interest for them that China joins
- The attitude of China towards the TPP (Tripartite Strategy)
- “Wait and see” attitude – Michael
- Developing their own bilateral agreements (competition to the TPP) – Marina
- Domestic reforms more market-oriented – Marta
- Conclusion Claudia
- Summary slide with key takeaways of the article
INTRODUCTION
- The paper by Ming Du, seeks to provide a Chinese perspective on how rising powers such as China are being excluded from mega-regionals trade agreements such as the Trans-Pacific Partnership (TPP).
- We will present the paper based on the three questions it answers:
- Why has China changed its initial suspicious attitude to a more neutral stance toward the TPP recently?
- What are the short-term and long-term effects of the TPP on China’s economic growth and geopolitical influence?
- How will China deal with a myriad of challenges posed by the TPP going forward, be in it or outside the TPP?
- Furthermore, it is pivotal to understand what is meant by a tripartite strategy: It is a fully regional agreement that offers market access (including duty-free access), investment, financial services, temporary entry, and government procurement.
- Interest for the US to turn more towards Asia
- Rebalancing strategy of the US towards Asia → Obama’s administration thought that the epicentre for growth for the country’s foreign policy, national security and economy, laid in a shift towards Asia
- TPP essential part of US’ strategy
- There are 5 key factors why the US wants to use the TPP in angling more towards Asia, in particular, with China
- 1. Economic reason → due to the economic distress of the country, the Administration realised that turning towards trade and exports would boost the economy
- US goods exports to the broader Asia-Pacific totaled $942 billion in 2012 (61% of the total US goods exports)
- Asia is essential for Obama’s strategy in geopolitical terms
- 2. TPP will initiate the ‘competitive liberalisation’ in Asia Pacific and the effects may influence the WTO
- Domino effect whereby other regional economies may feel pressured to join the TPP as a means to not be left out (too many disadvantages to stay out of it)
- Growing importance of TPP may result in bilateral trade negotiations with the WTO
- 3. TPP will help rationalise the ‘spaghetti bowl’ of Asia-Pacific FTA’s.
- This entails that a number of bilateral agreements have been conducted in the region and they may cause potentially conflicting obligations and administrative difficulties thereby negating the benefits of each trade deal
- 4. The TPP would be instrumental in achieving long-term objectives, particularly in setting the US as the leader and agenda-setter.
- Every FTA model has deliberately left out the US → which has caused great distress in the country
- As a rival to other intra-Asia FTAs, the TPP could lead a different path toward Asian economic integrations which would have the US as the leading force
- 5. The TPP allows the US to play a major role in developing new international economic rules on emerging trade issues (e.g., SOEs) and regulatory coherence across the developing region
- 1. Economic reason → due to the economic distress of the country, the Administration realised that turning towards trade and exports would boost the economy
- Article written in 2015: How is the situation today
- In September 2021 China applied to join the Trans-Pacific Partnership (TPP), shocking the Asia-Pacific and prompting economies such as Taiwan and South Korea to start their own applications. Some analysts view the move as a Chinese declaration that even with the elimination of tariffs, the country’s products can hold their own now.
- The United States (Under the Donald Trump Administration) declared its withdrawal from the TPP as soon as Trump came into power in 2017.
- The remaining members struggled to ensure that the organisation did not fall apart, the remaining members established the Comprehensive and Progressive Agreement on Trans-Pacific Partnership, without the US
- In 2015, when the negotiators were nearing their end, the leading negotiator at the time for the United States, Trade Representative Michael Froman, said that the agreement represented a strategic framework to force economic and investment liberalisation in China as its economic strength grew
- Thus, there are those who view the TPP as a bulwark against China. And yet, in September 19, 2021, the Chinese government applied to become part of the very framework, shocking the international community and in particular the United States.
CONCLUSION
- A successful TPP would have direct implications on China as a rising superpower
- China will be faced with the dilemma of participating or not in the TPP, because of the fear of being left out of an extremely profitable mega-regional trade agreement
- Emerging tripartite strategy toward the TPP:
- 1. China is not keen on the idea of the TPP, but is open to possibilities of the future
- 2. China’s activeness in concluding bilateral FTAs – opting for different regional economic integration
- 3. China started new domestic market-oriented reforms, which will eventually surpass TPP rules
