Tuesday, 6 October 2015

The TPP is a US story, don’t forget

It is poetically fitting that the 12 members of the Trans Pacific Partnership (TPP) emerged with a deal from five days of solid talks in Atlanta, Georgia. It is fitting because the TPP is an American story, despite how New Zealand sees it.

Although it many years from inception to agreement, almost 40% of the world’s GDP is part of a deal which will set the parameters for future 21st century free trade negotiations. New Zealand is one of the smaller members, and it is encouraging to hear it forced the larger members to take New Zealand’s economic needs seriously. But it wasn’t easy.

Finding common ground in a meticulously negotiated agreement is tough between two countries, let alone 12. But the sticking points of dairy, medicine, IP and automobiles which stalled the deal for more than two years were eventually navigated by some of the best trade negotiators alive.

Of course, that’s what the negotiators would say. Yet they each must now return home and submit a TPP text to 12 very different governments in the world’s most dynamic region. US President Barack Obama’s ownership of trade “fast track”, which forces Congress to say either yes or no without amendments, is the most important next step to watch.

The TPP will now go through “scrubbing” by lawyers and the various country’s citizenry and legal experts will no doubt comb through the text. The devil, as they say, will be in the details. If people thought the political debate was raucous before, they can expect it to truly begin now.

Taking a step back to view this deal on a geopolitical level, this column gets a strange feeling. Sure, Mr Obama can now end his eight years as the world’s most powerful man safe in the knowledge the US has made a significant step towards a post-9/11 world. But the geopolitical climate that compelled the TPP talks is markedly different today to when it was begun in the final term of the George W. Bush presidency.

The Asia Pacific, simply by the numbers, has become more dynamic as a region showing no sign of stopping this phenomenal growth, especially in Southeast Asia. On the other hand, Europe has not yet recovered from its declination in 2008 and may not recover at all. The two regions – one a producer the other a consumer – are not similar. The US and New Zealand have both noticed.

Also, one of the Asia Pacific’s bulwark nations is no longer performing quite so spectacularly. Back in 2008, China was registering double-digit growth rates. China-watchers knew the country faced significant constraints and would slow down eventually. That was a matter of if, not when. Today China’s growth figures hover near more normal rates as the country’s economic system evolves.

Thinking back to the Bush administration, both of these dynamics convinced the US it needed to focus on the Asia Pacific to rebalance its political economy away from the Middle East. It also suspected China’s rise might translate into direct military challenge and needed a way to corral the enormous regional power.

The TPP became just the economic jewel needed for Washington’s new political crown. The US has pretended to focus on the Asia Pacific ever since, casually letting talk about the TPP being a “containment” of China persist in the media and then placing the predominance of its naval force in the region. But its true focus was still on the Middle East and Europe: Asia Pacific came second.

This confliction inside Washington was made possible precisely because China failed to emerge as the aggressor that the US thought it would. Despite China’s purchase of a modern naval force, Beijing’s traditional focus remains on the Eurasian landmass. It has never considered control of the seas a serious geopolitical goal, and the US is starting to understand China’s worldview.

China even called the US’ bluff by formalising a request to join the TPP discussions in 2013. It was too late to enter the first round, and it is questionable whether it will join a second round, but its question required a response. Washington decided a cooperative play was better, and in so doing dispelled any notion of the TPP as a Chinese containment. Yet Washington remains suspicious and moved the TPP to the top of Mr Obama’s list.

The TPP is part of a long process of integrating the globalised world with rules. That’s extremely important for the coherency of such a world. Yet at another level it is only part of the shifting international patterns of the region. Patterns which include the “normalisation” of Japan, growing ASEAN dynamism and cooperation and China’s economic uncertainty.

The TPP may no longer be about containing China, but the original impetus for its creation hasn’t entirely disappeared. The US must rebalance away from its long war against terrorism in the Middle East to consider other geopolitical demands. Washington also knows if it doesn’t help write the trade rules for the Asia Pacific, then another power might.

The emerging American empire might be immature and still learning how to interact with its newly formed and probably unwanted imperial project, but the larger game of chess in the Asia Pacific region suggests players in Washington know how to make good moves to balance its competition. Sometimes, that’s all an empire needs to do.

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