A transpacific pact that would be the world's biggest free-trade zone and a platform for economic integration sounds like an idea for its time, with prospects for growth so clouded by Europe's chronic debt problems and America's woes. If it is to have any real credibility, the first priority of the fledgling Trans-Pacific Partnership, now under US leadership, is to get Japan fully on board, given opposition from its powerful farm lobby. But its overriding aim, if it is to realise its full potential, should be to work with Beijing to clear obstacles to China becoming a member.
Having joined a partnership that already included Singapore, Vietnam, Australia and New Zealand, the US has seized on it as its main regional trade initiative in a bid to increase exports and create more jobs. And it has linked it to non-tariff issues such as open sourcing of government procurement, the conduct of state-owned companies, complementary regulations and respect for intellectual property rights.
These cover long-standing points of friction in Sino-American relations. Thus, while the US has not explicitly ruled out Chinese membership of the TPP, the pre-conditions make it unlikely that Beijing will join in the near future.
The US pushed the TPP at the weekend's Asia-Pacific Economic Co-operation summit in Haiwaii, with President Barack Obama saying Canada and Mexico had indicated they would join and he hoped a legal framework could be drafted by next year. Analysts see remarks by President Hu Jintao at an informal meeting of leaders as a coded rebuff: 'We should work to establish a balanced, inclusive and win-win multilateral trading regime so that people everywhere will enjoy the benefits ...' Mainland experts on US affairs were more explicit, sending a message that Beijing would not feel obliged to abide by agreements about which it had not been consulted, and that the preconditions were seen as designed to squeeze out China as the US tried to counter its regional influence.
With Asia's average growth a multiple of the anaemic rates in Europe and America, it is understandable that after a decade of preoccupation with terrorism and the Middle East, the US wants to tap into regional markets. This follows renewed strategic re-engagement, which has reassured many smaller nations now adjusting to China's growing influence. These moves are welcome. But they must take account of China's legitimate interest in military and trade arrangements in the Pacific. Washington needs to tread carefully lest the TPP is seen as a club defined by the exclusion of China, and thus divisive and ultimately counterproductive. It should continue bilateral efforts to have China speed up market reforms that reflect the principles of the new group and reduce obstacles to co-operation.
