This piece was originally published on May 19th, 2015. It has been updated here to reflect the recent agreement reached on October 5th.
This week’s approval of the Trans-Pacific Partnership (TPP) in Atlanta was good news not only for free trade, but for the ability of the United States and like-minded states in both Latin America and Asia to construct a strategic environment in the Pacific in which they can prosper and benefit from, rather than being threatened by, the continued rise of China.
Although discussion of the TPP in the U.S. media has been framed in terms of free trade and the impact on U.S. jobs, the agreement is about far more than open commerce.
If the twentieth century was largely defined by wars and ideological struggles within an Atlantic-centered world, the twenty-first century is being defined by the Pacific. The TPP is the new geostrategic response.
The rise of China as a global power and the transformation of the security environment in Asia are driving this new landscape. Yet the expanding importance of the Pacific is not just about Asia, but about how Asia relates to the rest of the world. The Pacific is less a physical place than an arena in which China and the other countries of Asia relate to the United States, Canada, Latin America, and the Caribbean.
That relationship is about politics, ideas and institutions as much as it is about trade and investment.
The narrative that China is engaged in a nefarious plot to de-throne the U.S. and impose itself as a hegemonic global power is wrong. But so is the narrative that the Middle Kingdom merely seeks a friendly “win-win” engagement through which it will develop itself as it develops the world. While the principal goals of the Chinese leadership are arguably the security, prosperity and power of China and its people, rather than political domination and military conquest, the manner in which the Chinese government is pursuing those objectives, and what such a world might look like for those who are not Chinese, is deeply troubling.
The West has enjoyed a series of good centuries in which its power has grown as a result of its domination of global capital and technology and its residents have benefitted from its high-valued-added economies.
Yet for more than a generation, with accumulating effect, the Chinese state has sought to appropriate technology and industrial know-how to build a world in which the banks that control the capital and the companies that decide where investments are made are Chinese. The goal in this is that high-value-added production will occur in China, or at least by Chinese companies globally.
Such a “Chinese dream” is not an immediate threat or illegitimate. Most regimes seek the development and prosperity of their people. Yet the combination of the scale and success of China’s efforts to do so is transforming the world, not only altering trade and investment flows, but also reshaping institutions, the distribution of wealth, and the political fortunes of other actors, from China’s neighbors in Asia, to Latin American regimes like Venezuela, Argentina, and Ecuador—whose political solvency has been bolstered by Chinese loans.
Many in the developing world applaud these trends, believing with the bitterness of their own experience that it is about time that the West learns how it feels when someone else controls the hiring and investment decisions, the capital, and the political power that goes along with it.
Yet the key to security and prosperity in the newly emerging Pacific community is not replacing one dominant actor with another; it is ensuring that all nations have the opportunity to reap the fruits of their own efforts and policies. Although China may not seek to impose its political will in the Pacific through military means, its state-supported predatory capitalism sows insecurity, as its government coordinates with Chinese-state owned enterprises to force open foreign markets and to appropriate technologies and production processes.
Enter the Trans-Pacific Partnership. While the TPP may be incomplete in its membership (it doesn’t yet include all economic powerhouses along the Pacific Rim) and the scope of its provisions may be flawed, it remains a necessary foundation in building a broader diplomatic, commercial regime in the Pacific governed by transparency, property rights, and the rule of law.
TPP, in the form finally agreed to at the final negotiating round in Atlanta, is a compromise that will make some in the U.S. uncomfortable. Yet as the U.S. Congress considers ratification of the accord, it should bear in mind that the absence of a broader trade net spanning the Pacific will only hurt U.S. workers by allowing for the continued weak labor provisions in many of these countries.
Moreover, without TPP, the commercial regime that would come to dominate the Pacific will be one much more amenable to China’s interests.
At the same time, passage of TPP shouldn’t be seen or presented as a loss for China. Indeed, eventual participation of China in a future version of such an agreement would be very much in its interests, as well as the U.S.’s and the rest of the community encompassed by the Pacific. China’s accession to a broader Pacific trade regime would include it in international norms for intellectual property rights and basic labor and regulatory standards governing trade competition and investment and transparency. Building out the TPP—should the U.S. agree to its foundation—would advance a more stable situation throughout the Pacific bringing development and security to all.