TPP vs. RCEP: America and China Battle for Control of Pacific Trade

One vision of pacific trade will prevail. Will it be Beijing’s closed one or the open system embodied in the Trans-Pacific Partnership?

China’s version of global trade is found in the far less rigorous Regional Comprehensive Economic Partnership, which would include nations with about 30% of global GDP but exclude the U.S. In addition to China, the proposed pact would include the 10 member states of the Association of Southeast Asian Nations, Australia, India, Japan, New Zealand and South Korea. RCEP, as the Chinese-backed free-trade agreement is called, “will not achieve a level of ambition or comprehensiveness to provide a real alternative to the TPP,” as Meltzer, the Brookings scholar, tells us, but it will nonetheless form the center of East Asia’s trade regime if the Trans-Pacific Partnership does not come into existence.

What else is at stake? On Monday, Japanese Prime Minister Shinzo Abe called the TPP “a far-sighted policy for all participating countries that share the same values and are trying to build a free and fair economic zone.” China, as it tries to defend its outmoded system, challenges both those values and the principles of economic freedom and fairness.

That set of challenges has geopolitical implications. Defense Secretary Ashton Carter in April said the TPP was worth an aircraft carrier.

Beijing would rather face one more American flattop than an American-led trade grouping. With their peculiar view of the world, Chinese leaders are now seeking to use trade clout to enforce their China-centric—and narrow—vision. For example, they obviously do not subscribe to the concept of a global commons. On the contrary, they are working to exclude others from their country’s periphery, especially the international waters off their shores, the Yellow Sea, the East China Sea, and the South China Sea. A staggering $5.3 trillion of commerce crosses on and over that last body of water each year.

One vision will eventually prevail, Beijing’s closed one or the open system embodied in the Trans-Pacific Partnership. Congress, as it considers TPP, has a once-in-a-generation opportunity to affirm the principles underpinning the post-war order, which has for decades ensured peace and stability in Asia and elsewhere.

Gordon G. Chang is the author of The Coming Collapse of ChinaFollow him on Twitter @GordonGChang.

Image: Flickr/U.S. Embassy The Hague