Lima (GPA) – For all the horrible chapters and faults of the Trans Pacific Partnership (TPP), it seems President Obama was right about one thing – without the trade pact, southeast Asian countries are now looking to China for economic opportunity.
This past week at the Asia-Pacific Economic Cooperation (APEC) summit in Peru, Barrack Obama spent his time addressing the representatives assuring them that the United States and the southeast Asian countries would continue to find a way to cooperate economically. Yet despite Obama’s optimism, the real winner that seems to be emerging from the summit is China.
China saw an opportunity in the seemingly inevitable failure of the TPP to begin pushing their own trade deal to APEC; The Regional Comprehensive Economic Partnership (RCEP). The RCEP not only seeks to open the import and export markets in Southeast Asia but will also seek to appeal to typically western market partners such as Australia and New Zealand but intentionally excludes the US.
China has seen the election of Donald Trump as president as worrisome but advantageous at the same time. The leaders of China are concerned about Trump’s talk about backing out of the Paris climate treaty but at the same time see a huge chance to muscle in on Asian markets due to Trump’s campaign pledge of economic isolationism. China also sees the possible economic dependence of Southeast Asian countries as a key in possibly combating US hegemony in the South China Sea especially with Trump appointing a host of war hawks who focus on the Middle East.
The sudden death of the TPP is what led to the Chinese delegation becoming the unexpected keynote speaker at APEC, an organization that encompasses about a third of the world population and half of the global economy. It is almost impossible that Donald Trump will be able to keep his promises of bringing back manufacturing and resource extraction jobs to the US and the economy will need to rely more on global trade in order to continue to advance
the still growing US service industry, the RCEP looks to capitalize on Trump’s election to shut down a large portion of the exported goods the service industry relies on, instead having them cross more open trade borders for large markets in countries like Japan, India and China itself.
Now more than ever, China seems poised to strengthen it’s role as key trading partner to Pacific Rim countries as well as offering these new partners a chance to penetrate the growing markets in the Global South. All of this together could lead to China becoming the dominant economic superpower and ending their financial stagnation. Not many people in the US are sad over the death of the TPP, in fact many are elated and it seems China may be sharing some of that feeling just for a different reason.