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China’s the reason why U.S. needs the TPP

by

Bloomberg

House Democrats who’ve been interfering with President Barack Obama’s ability to negotiate the Trans-Pacific Partnership are missing something very important: The trade deal isn’t primarily significant because of the economy. It matters because it’s part of the broader American geostrategic goal of containing China — which pointedly hasn’t been invited to join the TPP.

In the new cool war, China’s rising economic influence is giving it greater geopolitical power in Asia. The TPP is, above all, an effort to push back on China’s powerful trade relationships to reduce its political clout. By weakening Obama’s ability to pursue it, congressional Democrats had been unintentionally weakening the U.S. side in the cool war.

It’s easy to miss the geopolitical importance of the TPP, because in the cool war, economics and politics sometimes appear to be operating in unrelated spheres. Consider that the U.S.-dominated security regime in Asia since World War II has depended on a “hub and spokes” arrangement with the U.S. at the center and allies such as Australia, Japan, South Korea and Taiwan all connected to the U.S. and only very loosely to one another.

All four of those allies rely on the American relationship to protect them from China. Yet in the decades of China’s rise, each of those countries has developed trade relationships with China that first equaled and then surpassed their trade relationships with the U.S.

During the Cold War, it would’ve been almost unimaginable for countries belonging to the Eastern bloc or the Western allies to have closer economic ties to the other side than to the side on which they were dependent for their security. Trade between communist and capitalist worlds was highly constrained and limited. In the zero-sum logic of the Cold War, it made little sense for either side to strengthen the enemy by trading with that enemy’s allies.

The rules of the cool war are completely different — which is why it’s cool, not cold. It’s not just that U.S. security allies trade abundantly with China. The U.S. does, too: It’s still the largest export market for Chinese goods. And the government of China is still the single largest foreign holder of U.S. Treasury bonds.

Given that the defining feature of the cool war is that it’s possible to trade extensively with your geostrategic opponents, you can see why the connection between the TPP and the cool war might be easy to miss.

But in fact, the TPP was conceived as a crucial tool in the next stage of the cool war. China has been expanding its security position within Asia, growing its military budget at more than 10 percent a year and staking claims to islands both real and imaginary or newly constructed.

In all this, China is using its close economic relationship with its neighbors as leverage to build its geopolitical position. Its ultimate goal is to displace the U.S. as the regional hegemon. President Xi Jinping’s slogan of the “Chinese dream” requires nothing less.

The TPP aims to reduce some of China’s geopolitical resurgence by damping down the extent of China’s regional trade dominance. China itself has a proposed regional trade alliance, the Regional Comprehensive Economic Partnership, that would include 16 members and exclude the U.S. Australia, Japan and South Korea are all involved in negotiations to become members. The TPP is a direct, competitive counterpart to the RCEP.

China recently opened negotiations for a new Asian Infrastructure Investment Bank — another cool war move to deepen China’s regional economic leadership. Despite U.S. pressure not to participate, the Chinese got applications from essentially all of its regional security allies. Even Taiwan signed up, a pretty remarkable act for a country whose existence basically depends on the U.S.

The AIIB fiasco shows how powerful China’s position on the economic side of the cool war really is. It’s hard to contain a nation that can tempt your allies to break ranks with you — and that knows your leverage is inadequate to stop them.

Yet the overarching goal for the U.S. in the cool war is and must continue to be a form of containment. For reasons of prudence and caution, the U.S. never says officially that it aims to contain China. But that’s the whole point of our military presence in the region. Yes, we’re protecting our allies from being dominated by China — but we’re doing so by functioning as the dominant regional military actor.

China’s economic growth is a fait accompli. In general, it’s a great thing, bringing hundreds of millions of people out of poverty. But the U.S. needs a range of tools beyond the military to contain China. A trade deal that excludes China is a good way to do it.

And progressives in principle should like this approach. After all, one reason China can’t join the TPP is that it isn’t about to allow labor unions or other progressive institutions that the TPP requires of its members. Indeed, the TPP has been designed precisely to include free or at least freer countries than China — and to encourage greater freedom in others, like Vietnam.

The TPP uses trade in the service of geopolitics. It will make the U.S. stronger in the cool war. And that’s an issue progressive Democrats should care about.

Noah Feldman, a Bloomberg View columnist, is a professor of constitutional and international law at Harvard University.

To contact the author on this story:

Noah Feldman at nfeldman7@bloomberg.net

  • Bobserver

    While the USA may need the TPP to contain China, here in Australia we need the TPP like we need a hole in the head.
    Australia already has FTA’s with 8 of the 11 TPP “aspirants”. There are no benefits to accrue beyond the Australia-USA FTA and probably more IP restrictions, costlier medicines, “franken” foods to be input into the Australian agricultural system ruining whatever premium, quality recognition that Australia has overseas when it comes to food products, and a sovereignty-limiting Investor State Disputes Settlement arbitration courts where multi-nationals can attempt to overrule governments on environmental and safety matters.

  • Jared

    So are you unaware of the hidden portions of the TPP, such as those that would make countries liable for potential loss of profit, that would spike the price of pharmaceuticals, or would allow people to get sent to prison for the smallest copyright violations such as YouTube reviews of video games with gameplay?

    Or do you just not care?

    • 151E

      You raise important issues that voters should be aware of concerning the TPP and the erosion of national sovereignty by transnational corporations; however, clearly the focus of this particular article is clearly the TPP as an economic check against China.

  • David Mowers

    When do the people get a government that works for everyday folks?

  • tisho

    I used to support TPP based on the small information we were told from the media, but after i spent few hours researching more into it, i am now firmly against it. TPP has nothing to do with free trade, it is only a sugar coat tittle in order to fool you, just like they did with the patriot act, not really a patriot act at all but a good tittle is easy to pass. TPP is so secretive, even the senators that are supposed to vote for it don’t get to read the full text. From what i’ve learned, it is not a free trade deal, it is rather the opposite, it restricts a lot of trade and it grants a lot of power to certain companies to have jurisdiction in foreign countries. It means that, not only you don’t get the competition a free trade gives you, but now the big companies have the power to sue foreign governments in their favor. This is the last thing the US or any country needs. It has nothing to do with free trade so don’t get fooled by the tittle.

  • iwishitweretrue

    It’s pretty obvious that when anyone signs a deal that has been hidden from everyone else, they are going to get Shanghaied!! Businesses and large corporations due extensive due dilligence to avoid getting scammed or trapped into deals which are lose lose. The TPP and TTIP deals are notorious for being secretive, and there is a reason for that. Big business and the moneymen behind the TPP and TTIP see the governments involved as suckers, who can be paid off or leveraged to do what they want, so that the TTP and TTIP can get signed off. What the TPP and TTIP does is to give these money men and large corporations de facto control over the countries that sign up to the TPP and TTIP, so that these money men and large copanies control these countries rather the governments involved – the TPP removes the sovereignty of countries and replaces that sovereignty with control by large corporations and moneymen. It’s going to be very very bad for ordinary working people, ordinary people, and small businesses, who are going to get controlled by these large corporations and money men without any recourse to government or the legal system to hekp their cause. We have already seen tha the TPP allows pharmaceutical companies to have perpetual on their drugs, and that these patents will apply to everything else, so that people and countries are ;ocked into highly expensive products that people are forced to buy. Huge numbers of jobs have been lost as the TPP strips away job protections and workers rights, which is why the Democrats in the US did not back Obama over the TPP in Congress. What the TPP will do is to replace democracy with Corpocracy so that it is the large corporations and the money men control the countries. The China threat is just a smokescreen or a stick used by the large corporations and money ment to try and trick the governments into signing the TPP. China believes in free trade and won’t try to pull off such an eleborate scam as the TPP does, and is interested in a regional ASEAN free trade agreement, where the governments will still retain control rather than the large corporations and money men.

  • Steve Godenich

    So, what is being described in the article,… the president needs Trade Promotion Authority to most efficiently conduct Foreign Policy with an up/down vote from Congress and no debate. Further it is implied that TPP is actually a treaty that includes ~600 large business interests and 12 countries crafting the language of the document. These negotiations are being conducted under the auspices of the US Trade Representative. Part of the TPP, namely ISDS, involves handing over certain sovereignty rights associated with trade to an international trade tribunal if I am not mistaken. This hybrid document appears to be a government-backed business deal crafted by an elite set of business and government leaders plus a treaty to enforce it. The phrase ‘monopoly capitalism treaty’ may be a better choice of words than ‘Free Trade Agreement’, although it does not fully describe the political nature of it.

  • Liars N. Fools

    It is completely inaccurate to say that RCEP was proposed by China to oppose TPP. RCEP was proposed by ASEAN and is meant to join together its ten members and those nations with which ASEAN has free trade agreements (FTAs). It has “lower standards” to TPP proponents but has far wider coverage because China, India, and Indonesia are in RCEP but excluded from TPP as are American treaty allies like Korea, Thailand and the Philippines.

    I am not a supporter of TPP. It has problematic members in Asia like Vietnam, Malaysia, and Brunei. It is geared towards well connected corporate interests. Its IPR “strengthening” seems to be geared to make a lot of drug companies richer and drugs much costlier for those who need them. It has a controversial investor state dispute settlement mechanism that could undermine domestic laws. Its environmental and labor standards are laughably low.

    That being said, TPP is not just about Asia. Five members are in the Americas: America, Mexico, Canada, Chile, and Peru. Two are Oceania : Australia and New Zealand. The remainder are in Asia: Japan, Vietnam, Malaysia, Singapore, and Brunei. America has free trade agreements with at least six of these countries, and the most important non-FTA partner is Japan. If TPP is really about liberalizing trade, we would seek a FTA with Japan, a much more straight-forward if difficult negotiation.

    From a strategic point of view, it makes sense to link America to Asia, and in this sense, TPP is indeed an important concept. But the selling of this strategic concept on primarily free trade grounds is its weakness. There will be some big American winners, but largely, in economic terms, this will not be that much of a boost. To sell it as an anti-China move is also problematic because every single TPP member, America included, wants to maximize its economic involvement with China.

  • George Silversurfer

    TPP serves Washington geological hegemony in its attempt to contain China..nothing else.

    • Bobserver

      You must mean “geographic” or “geopolitical” hegemony

      • George Silversurfer

        Yes I need to proof read before posting. Geopolitical