While the United States and Japan dawdle over the last details of the Trans-Pacific Partnership trade agreement, China is moving to fill the vacuum. Beijing is intent on defining trade relations in the Asia Pacific for the 21st century.
As host of the approaching Asia-Pacific Economic Cooperation meetings, which take place just a week after America’s midterm elections, Beijing has been pushing for a post-meetings declaration that will lock in its vision of free trade — language that will, according to reports, endorse the so-called Beijing road map, which does not include the T.P.P. As the United States trade representative, Michael Froman, said, “We do not expect to have a final agreement on T.P.P. at APEC.”
The Trans-Pacific Partnership agreement would bring broad economic benefits for a vast majority of citizens in the 12 countries that would be signatories to the deal — including Australia, Singapore, Malaysia, Mexico and Vietnam, among others. The T.P.P. would set high standards for regulatory systems, rules on intellectual property and fair competition — standards that China should aspire to but cannot currently meet.
So as well as promoting its alternative plan to shape the region’s economic future by means of an Asia-Pacific free trade area with considerably lower standards, Beijing is betting that the small number of vocal opponents of the T.P.P. in America and Japan will derail the agreement. For the T.P.P. parties, failure to conclude an agreement would have untold costs, as countries like China that pursue mercantilist, government-directed economic policies would be emboldened to set the terms of trade in the Asia-Pacific region.
China understands that democratic systems like those of the United States and Japan show great deference to the interests of small groups. They protect minorities from the tyranny of a majority. In effective democracies, however, the interests of small groups are protected not through stalemate and inaction, but through compromise, as new policies move forward for the overall benefit of a country.
Trade negotiations test democracies to their limits. In the final phases, weary negotiators attempt to find common ground. Small interest groups that fear being disadvantaged become more shrill and intransigent; larger business and industry stakeholders that would gain by the deal fall largely silent; and the public, which would gain most of all, is confused. Media coverage is saturated with ever more strident rhetoric over ever narrower issues, overshadowing the fundamental interests at stake.
This is the stage we have reached in the American-Japanese negotiations over the Trans-Pacific Partnership. Public debate has become dominated by, on one hand, the profits of pork farmers in Japan and the United States and, on the other, political maneuvering to assign blame in anticipation of a failure to close a deal.
Lost in the discussion are the advantages to both countries’ overall national interest and an overwhelming majority of their respective citizens. Few voices are heard saying that a T.P.P. agreement will establish American-Japanese leadership in setting a course that will enable greater prosperity throughout the Asia Pacific region.
It is time to make the compromises necessary to close a deal that will set the standard for international business in the future. Critically, a small number of relatively minor issues must not block an agreement between two of the world’s three largest economies.
The T.P.P. will provide an American- and Japanese-led framework for business in the world’s center of economic power. It will establish the best practices already observed by American and Japanese companies for a trading area of nearly 800 million consumers in 12 countries. And it will be open to new members, including China, that are willing to accept the high standards that the T.P.P. will demand.
It’s important to note that China has expressed interest in joining the T.P.P. — even if this reflects a view in Beijing that the agreement is more inevitable than desirable. While China’s accession to the T.P.P. would place the world’s second-largest economy on a more certain and stable path, it would do so based on rules developed under the leadership of free-market democracies. Many of the areas in which weak World Trade Organization rules have failed to level the playing field for foreign companies in China would be strengthened under the T.P.P., making China a better place to do business.
China understands that the T.P.P. will reinforce the vital American-Japanese alliance. That alliance is, of course, the bedrock of the region’s security upon which the Asian economic miracle was built. As Japan assumes a more important international role, the T.P.P. provides additional strategic ties that will enhance Tokyo’s ability to manage relations with the countries that pose the greatest challenges.
A failure to conclude the T.P.P. would be a terrible setback. In place of establishing joint leadership in a rules-based regional economic system based on free-market principles, the American-Japan relationship would suffer from a period of mutual recriminations and loss of trust and cooperation. As both President Obama and Japan’s prime minister, Shinzo Abe, have stressed, the time for bold action to conclude the T.P.P. is at hand. China’s bet against Japan and the United States has only reinforced the urgency of closing the deal.
Adm. Dennis C. Blair, a former director of national intelligence and former commander in chief of the United States Pacific Command, is the chairman and chief executive of the Sasakawa Peace Foundation USA.