TPP: The pivot to the Pacific (Part II)

DIE HARD III

Herman Tiu Laurel

6/19/2013

Daily Tribune

While the Trans-Pacific Partnership (TPP) started with economic light- to middleweights in 2005, it expanded in 2009 with one heavyweight, the US of A. Since then, it has added to its fold other light- to heavyweights (Canada, Mexico, Australia, Malaysia and Vietnam) to the exclusion of other major economic heavyweights.

Absent from the TPP process were China, Russia, Brazil and India, the countries that form the core of the BRICS (Brazil, Russia, India, China, South Africa) economic alliance representing 25 percent of the world's trade.
Song Guoyou, an Associate Professor of the School of International Relations, Shanghai Fudan University, points out that "the current TPP member countries in negotiation are mainly military allies of the US, which demonstrates the fact that the US 'has followed its traditional pattern of choosing FTA partners—offering priorities to its military allies.'"

The exclusion of China and the major BRICS countries have led to conclusions, such as this published in a London news site, World Outline, entitled "Trans-Pacific Partnership (TPP): Bad news for Brazil and China?" last April 6: "…the TPP aims to go beyond existing trade agreements, such as … Apec (Asia-Pacific Economic Cooperation) and Asean (Association of Southeast Asian Nations), and create a single market … This single market … is likely to have implications to trade flows in America and Asia as a whole, and alter the 'Asia pivot' … The TPP has been designed to become a key source of sustained growth by guaranteeing new markets for American products, and assist in the US economic recovery … It could also become a tool for containing and undermining Chinese economic power in the Asia-Pacific region.

"By providing these strategic partners with incentives to concentrate on trade relations amongst each other, the TPP is likely to diminish the dependence of certain countries on Chinese goods. It is worth noticing that in times of tensions between China and Japan and between China… the Philippines, Vietnam, etc. … having a tool to diminish Chinese economic power in the region and the diversification of partners could represent a … foreign policy approach… On the Latin American side of the TPP … Brazil has been investing massively toward infrastructure programs designed to integrate the region and to facilitate the transport of goods and services among its neighbors… By providing promising trade alternatives… the TPP could also represent a challenge for Brazil … Having other partners to assist in the regional development could also diminish Brazil's role as the regional paymaster."

Professor Cai Penghong, director of Apec Research Center, Shanghai Academy of Social Science, expressed what may be the bottom line of the Chinese response: "…if I am asked to give a word of advice to President of China about the TPP access, I would not like to suggest China to submit an application at this moment... First, we are still wondering the real American intention. It is natural for (the) Obama administration to pursue a double trade in five years and (address) the job issue but a question still remains about its geopolitical intention. It seems that US is using the TPP as a tool as part of its Asia Pacific strategy to contain China … Second… it is unbelievable that the TPP negotiation activities are secretly conducted and non-members feel hard to assess what will happen. TPP is on the track of Apec regional integration process but APEC members know nothing. Third, it seems (to be) a trend that trade issues have been politicized…"

As reported by Peter Hirschberg, Russia is cool to the TPP. Its Economy Minister, speaking before the Apec Summit in Vladivostok in 2012, even stated that his country didn't think the TPP agreement among about a dozen Asia-Pacific countries would be concluded in the "near future."

Russia is clearly putting priority and emphasis on continuing the strengthening of the Apec. South Korea, despite its military alliance with the US, seems to want to steer clear of the US-dominated TPP for the meantime. Its Trade Minister Bark Taeho said, "We have to sit and analyze what kind of level TPP is aiming for … At a later stage, between an East Asian pact and the Trans-Pacific pact, we want to (play) some role in merging these together…" The East Asia Pact is amongst China, Japan and South Korea.

The TPP is clearly a US move for its corporate pillars to outflank China and the BRICS in trade, and a parallel instrument for the US military's "Asia pivot."
If it's a truism that a multipolar world is better for the community of nations, the reconsolidation of US economic, financial, and trade power, if successful, would be deleterious to its welfare. However, it is highly unlikely that the US and its TPP can succeed as the US and its economic allies, i.e. Europe and Japan, can hardly provide for all the needs of the world today.

Other countries are unlikely to be fully enthusiastic with the TPP, such as South Korea with its huge trade with China and Latin American countries associated with Venezuelan-led ALBA (Bolivarian Alliance for the Peoples of Our America). For the Asia-Pacific region, Apec will still be the main driver for growth and prosperity.

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