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The TPP is not a containment strategy

The TPP is not a containment strategy

Is the TPP an effort to contain China? If you've been reading the papers or glancing at social media recently, you could be forgiven for thinking so. The New York Times didn't quite use the word containment, but argued that the agreement was a 'win for the United States in its contest with China.'

There is a strategic dimension to the American push to conclude the TPP, but it's not about containing China. Rather, the TPP is part of the Obama Administration's broader Rebalance strategy to update and reinforce the liberal international order in the Asia Pacific. 

On the political side of things, this means the peaceful resolution of disputes, ensuring freedom of navigation, and the freedom to access information. On the economic side, it means, inter alia, updating the trading rules to reflect technological advances that have increased the value of information relative to resources in global trade. These changes have required negotiators to go beyond tariffs and address behind-the-border rules that affect trade.

Those pushing a containment narrative note that the pact excludes China, but ignore the fact that American officials have repeatedly said that they are open to China's eventual accession to the agreement. The President himself made this point last December:

And by the way, there's been some suggestion that by doing TPP we're trying to contain or disadvantage China. We're actually not. What we are trying to do is make sure that rather than a race to the bottom in the region there's a reasonable bar within which we can operate. And we hope that then China actually joins us in not necessarily formally being a member of TPP but in adopting some of the best practices that ensure fairness in operations.

That said, negotiators have had to be realistic, recognising that it would have been very difficult for China to sign up to these standards at the start. Better, then, to create the partnership now with governments that are ready to go, demonstrate the agreement's value, and entice other countries, including China, to sign on to the agreement or adopt some of the standards it sets as their own.

Such hopes are not unreasonable. [fold]

There has been persistent speculation that Chinese leaders could use TPP accession to apply external pressure in order to achieve economic reforms that domestic political interests have thus far prevented. Chinese Premier Zhu Rhongji did the same with WTO accession in the late 1990s (and as in that case, China might negotiate slightly different terms in recognition of the size of its economy and how far it would have to come to meet the new standards). Chinese accession would raise environmental and labour standards in China, and would be the best possible result for all concerned, including the US.

So why have institutions like the New York Times and the powerful American trade union federation, the AFL-CIO, bought into the containment narrative? The Obama Administration is at least partly to blame. Since early this year, the Administration has increasingly used the fear of a Chinese-dominated economic and security order as a foil to capture the attention of its domestic political audience, particularly Congress.

In his State of the Union address to Congress in January, President Obama said:

China wants to write the rules for the world's fastest-growing region. That would put our workers and our businesses at a disadvantage. Why would we let that happen? We should write those rules. We should level the playing field.

It's not exactly the stuff of containment — the focus is still on rules — but it does suggest a competition. Administration officials compounded the problem when, in an otherwise strong speech in Arizona in April, Defense Secretary Ash Carter claimed that 'in terms of our Rebalance in the broadest sense, passing TPP is as important to me as another aircraft carrier.'

Carter's comments were problematic because while much of what the US seeks to achieve through the Rebalance is unrelated to China, the US is also engaged in an effort to deter China from taking assertive actions that undermine the liberal order in the region. That effort, too, has occasionally been mischaracterised as an attempt to contain China, so mentioning aircraft carriers and the TPP in the same sentence was probably unwise.

Such rhetoric may not play well in China or even Australia, but the Administration seemed to believe it would be effective on Capitol Hill. While members of Congress have been slow to recognise the impact of a stronger commercial relationship with East Asia for American interests, they instinctively understand the impact of an aircraft carrier. While they may not realise that trade with the broader region exceeds American trade with China, fear of Chinese economic power is a common theme in American elections. And at this stage, with Congressional approval of the deal very much an open question, the Administration has sought to put the deal in terms members of Congress can understand.

The problem is thus one of multiple audiences. The same global information environment which the Obama Administration hopes to take advantage of through the TPP also makes it more challenging to sell to Congress without agitating the very region in question. Moreover, during my research on Congressional attitudes toward Asia Pacific policy over the last year for my recent Lowy analysis on the subject, I found that the Administration's attempts to capture the attention of Congress by using China as a foil had limited reach among Republicans and almost none among Democrats.

The Administration would thus be well advised to revert to its earlier language on the TPP, which stressed the way it could draw other countries to adopt higher standards. The TPP is not about containment; the Administration should take care not to speak about it as though it is.

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