Without TPP return, it’s hard for the US to deal with China

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In another U-turn of his U-turns, Donald Trump ended his recent flirtation with rejoining the Trans-Pacific Partnership — a huge trade deal he stringently denounced on the campaign trail and abandoned with fanfare in his first Monday in office.

When meeting with the lawmakers from agricultural states to discuss his administration’s proposed tariffs on China on April 12, Trump informed them that he had ordered his top economic advisors to look at re-entering the pact championed and signed by President Barack Obama.

A few hours later, he tweeted he would only reconsider rejoining the TPP — renamed Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), modified and signed by the remaining 11 nations last month — if it were a “substantially better” deal than the one struck by his predecessor.

Later on Tuesday (April 17), after hosting a dinner for the visiting Japanese Prime Minister Shinzo Abe, Trump turned to Twitter to end any speculations about his TPP reversal. “While Japan and South Korea would like us to go back into TPP, I don’t like the deal for the United States,” he wrote, explaining: “Too many contingencies and no way to get out if it doesn’t work. Bilateral deals are far more efficient, profitable and better for OUR workers. Look how bad WTO is to U.S.”

The content, timing and undiplomatic tone (just after a dinner with the leader of one of America’s strongest allies, who came to convince him to rejoin the pact) of Trump’s latest twitter TPP comment epitomizes what he has done since his election. Such a comment can also explain why China has been so proactive and confident ever since.

In all his important addresses both at home and abroad — such as at the World Economic Forum and the United Nations Office in Switzerland in January 2017 or the Boao Forum in China this month — since Trump’s stunning election victory, Xi Jinping has vehemently portrayed China as a benign, responsible and cooperative nation that champions free trade, globalization and multilateralism and safeguards the international order, rules and agreements.

In the Chinese leader’s portrayal, his communist-ruled state is even becoming an altruistic power that “will not only seek happiness for the Chinese people, but also strive for the cause of human progress.”

By contrast, Trump’s America has been depicted — implicitly by Xi and explicitly by Chinese officials, academia and media — as a reckless, egoistic and aggressive power that pursues a nationalist, unilateralist, isolationist, protectionist and zero-game foreign policy.

Obviously, Xi’s China isn’t that good and Trump’s America isn’t that bad. In fact, as previously underlined, the former is still lagging far behind the latter in terms of economic and especially political openness as well as in many other areas and fronts.

That said, Trump’s ascendance to the presidency and his “America First” policies are the main reason that, as one scholar recently put it, “China — an illiberal, mercantilist nation whose increasingly revisionist behaviour represents perhaps the greatest long-term threat to the existing international order — [is] styling itself as [the] champion of the liberal, cooperative system America forged” and led after World War II.

Trump’s withdrawal from the TPP — a multinational agreement championed and signed by his predecessor — has surely given Xi and his propagandists a higher moral ground and a better political platform to characterize China and the US in such contrasting manners.

Coupled with or, perhaps, inspired by many of Trump’s key decisions, including the TPP departure, China has proactively championed its grand international initiatives, notably Xi’s signature Belt and Road Initiative (BRI). All of these have likewise provided Beijing with a greater strategic advantage.

In August 2016, amidst widespread opposition to the deal in America, and with Hillary Clinton, the then presidential democratic candidate, also rejecting the pact, Singaporean Prime Minister Lee Hsien Loong told his American hosts, “For [your] friends and partners, ratifying TPP is a litmus test of your credibility and seriousness of purpose.”

In an in-depth interview with Time magazine in Singapore two months later, he again warned the US that, should it walk away with the deal Washington sought to convince other nations to join, hardly anyone would believe it anymore.

Against this background, Trump’s eventual TPP abandonment was unquestionably a defining factor behind the lion state’s current bonhomie with Beijing, of which it was previously critical. Speaking recently at China’s Boao Forum for Asia, Mr Lee, one of a few regional leaders attending the event, hailed China’s growing role in the international system and the importance of Beijing’s efforts to uphold openness and multilateralism.

The trade pact, a central pillar of Obama’s so-called Asia pivot, was designed as a bulwark against China’s rising regional dominance and a concrete commitment by the US to lead the region and shape its rules on trade, investment, intellectual property (IP) and other areas. Ironically, these areas, notably IP rights, are central to Trump’s ongoing trade conflicts with Beijing.

The TPP has extensive provisions on IP protections that the Obama administration had fought hard to include. Yet, the CPTPP left out 22 provisions from the original text, with most of them relating to protections for intellectual property.

That means it’s hard for Trump to achieve a better deal. More crucially, by leaving such an advanced and far-reaching trade pact with a group of allies and like-minded partners, Trump has refused to use what Ben Sasse, one of the senators who met Trump last Thursday and was upbeat about his possible TPP volte-face, and other economists regarded as “the best way” to deal with a rising China and its alleged trade abuses.

It seems not only the Trump administration, American trade experts and politicians across the ideological spectrum, including Senator Elizabeth Warren, a Trump foe, but also other international figures, including British Prime Minister Theresa May, have raised concerns about China’s unfair and illegal trade practices.

But, as illustrated by its tit-for-tat response to Trump’s recent tariff threats, Beijing is unwilling to make concessions. A key reason for this is the US president’s failure to galvanize enough international support for his cause. Worse, many of his undiplomatic, ill-advised behaviors — such as firing off the above TPP tweet — have alienated his country’s friends and partners.

Economically, contrary to what Trump believes, the TPP significantly benefits America. According to a study by the Peterson Institute of International Economics, the US “experiences the largest single net loss by moving from a $131 billion gain (under TPP12) to a $2 billion loss (under TPP11).”

All in all, by quitting the vast, advanced and multilateral trade agreement, the US has forfeited not only economic benefits, but also the pact’s huge diplomatic, political and strategic values, without which it is difficult, if not impossible, for America to effectively deal with a powerful and forceful China, its unfair economic-related practices and other issues, such as Beijing’s maritime expansionism.

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