by Chong Zi Liang
Leaders of the TPP member countries
on the sidelines of the Apec Summit
Lima, Peru, last month.
PHOTO: CAROLINE CHIA
Some might see TPP
as rivaling RCEP,
but the reality
is more complicated,
In one corner, there is the United States; in the other, China.
The sole superpower
trying to maintain its top position versus a dormant giant now
increasingly ready to assume what it deems its rightful place in the
Or so the popular narrative goes. It sees both nations vying for
influence in the region by binding other countries to them through
which the US is a part of
Comprehensive Economic Partnership (RCEP),
which China is in
This impression has been
reinforced by rhetoric from both sides.
Barack Obama, in championing
the TPP, argued that if the US did not take the lead in setting
trade rules, other countries would have a chance to set less
When it was signed by its 12 member countries:
...the TPP was hailed as
a landmark trade deal setting high standards in labour and
It began life in 2005 as a smaller agreement between some
like-minded partners - the Pacific-4 (P4), comprising Singapore,
Brunei, New Zealand and Chile - with a view to growing it into a
The US declared its
intention to join the deal in 2008, and other members came on board,
with the first round of talks starting in 2010.
COSTLY FOR AMERICA TO PULL OUT
If the Trump administration follows through,
as seems likely now,
with backing out from the TPP,
it will be a very costly move
in terms of the US' reputation
as a reliable broker
in the Asia-Pacific.
DR DAVIN CHOR,
NATIONAL UNIVERSITY OF
on how such a move could allow
to assume a greater leadership
Negotiations concluded last year, and the deal was signed in
February this year.
But the TPP can come into force only if it is approved by six
countries that account for at least 85 per cent of the group's
economic output - which means ratification by both the US and Japan
is needed because of the size of their economies.
Approval by the US Congress is now unlikely as President-elect
Donald Trump has said that he will withdraw the country from the
treaty on his first day in office.
With the TPP hanging in the balance and the world jittery about US
commitment to free trade, Chinese President Xi Jinping sent
out a reassuring message at
last month's Asia-Pacific Economic Cooperation (Apec) Summit.
"China's door will
never be shut, and will only be opened wider," he said as he
pledged to see negotiations through for the RCEP.
At the end of the summit,
Chinese officials said that more countries were looking
to join the RCEP.
While there is some rivalry, the full picture is also more nuanced.
For one thing, the RCEP is Asean-led, and involves the 10 Asean
members and the six countries that the bloc has free-trade
Seen in this light, RCEP
is an Asean initiative that is focused on trade, and not so much a
"tool" of China to spread its influence.
The initial idea for the RCEP came in the 2000s as China, Japan and
South Korea began exploring free-trade agreements with Asean. It was
expanded to include the other three partners, and talks on a wider
pact started in 2012.
In the latest round of RCEP negotiations, which took place in
Indonesia last week, Indonesian Trade Minister Enggartiasto
Lukita urged members to conclude the negotiations by next year,
in time for Asean's golden jubilee.
"We cannot afford to
drag the negotiations further at a time when the global trade
outlook continues to be bleak, coupled with rising protectionism
in both advanced and developing countries," he said at the
opening of the 16th round of negotiations.
On Thursday, Malaysia's
International Trade and Industry Minister, Datuk Seri Mustapa
Mohamed, noted that the RCEP,
"negotiations will be
substantially completed by the end of next year".
Asked if there is more
urgency now that Mr. Trump has said that the US will not be
ratifying the TPP, he said:
"You can say that."
The US and China have
also cooperated on the Free Trade Area of the Asia-Pacific (FTAAP),
which has been Apec's long-term goal.
Over the past two years, both countries have co-chaired the
feasibility study on the FTAAP, which was presented at the Apec
Summit last month and accepted by all the member economies.
Both the TPP and RCEP
were recognized as possible pathways towards the FTAAP.
Still, with the TPP hanging in the balance and the possibility of an
insular US over the next few years, there is an opening for China to
step into a greater leadership role.
"If the Trump
administration follows through, as seems likely now, with
backing out from the TPP, it will be a very costly move in terms
of the US' reputation as a reliable broker in the Asia-Pacific,"
said Dr Davin Chor, an associate professor of economics at the
National University of Singapore.
There is a possibility
that the US will move quickly with counter-proposals to engage
Asia-Pacific economies, he added.
But if that does not
"it is hard to see
how the Asia-Pacific countries would not gravitate more towards
the Chinese economy, especially if RCEP negotiations quickly
"It is a safe assumption that China can be expected to be more
assertive in the Asia-Pacific region.
In fact, depending on
how elections in France and Germany unfold over the next year or
so, China could ironically end up being the staunchest defender
of free trade in the world," he said.
Indeed, when New Zealand
Prime Minister John Key was asked at the Apec Summit if the
world would turn towards China for economic leadership if the TPP
fell through, he said:
"If the US is not
there, that void has to be filled, and it will be filled by
But Dr Malcolm Cook,
a senior fellow at the ISEAS - Yusof Ishak Institute, noted
that, even if China's gravitational pull grows stronger, the US
would remain top dog for the foreseeable future.
First, he pointed
out, Chinese leaders have consistently stated that they do
not want the mantle of global leader, possibly because they
do not see that as being in their interests.
Second, while the
US will have Mr. Trump as its leader for the next four years
at least, it remains to be seen if there will be a continued
decision by the US to withdraw from the world.
between 30 and 50 countries - including Britain, Japan,
South Korea and Australia - willingly align themselves with
the US because they feel it is in their national interests
to do so.
China, in contrast, has
not exactly endeared itself to its neighbors, thanks to its
increasingly assertive posture in the South China Sea and East Asia
"If you look at the
US global alliance system," said Dr Cook, "that is not a
hegemonic system where countries are forced to join the US or
face some type of punitive reaction."
"The US is in an
extraordinary leadership position that's never been seen before,
so nobody can replace it."