Participation provides options for better management of bilateral ties

US scholars believe that encouraging China to join the Trans-Pacific Partnership Agreement negotiations will have a huge impact on US-China relations and the future trade framework of the Asia-Pacific region.

Vice Finance Minister Zhu Guangyao said in Washington recently that the TPP would be "incomplete" in the long term without China.

Jeffrey Schott, a senior fellow at the Washington-based Peterson Institute for International Economics, believes China's participation would allow greater opportunity to manage crucial US-China economic relationships.

Speaking on Thursday at the Woodrow Wilson International Center for Scholars in Washington, he said: "Often you can do things in a regional context that you can't do bilaterally."

He said China has begun to look seriously at the implications of the TPP for Chinese economic development and how its implementation could complement and reinforce China's domestic economic reforms rolled out at the Third Plenum of the 18th Central Committee of the Communist Party of China a year ago.

China had been wary of US-led TPP negotiations two years ago and many in China regarded it as a US scheme to contain it economically and strategically, but its views have softened since then.

Schott said regular consultation between US and Chinese officials on the progress of TPP negotiations have contributed to a more open and receptive Chinese attitude towards the TPP.

Schott's comments came just a day after Foreign Minister Wang Yi announced in Beijing that China and other APEC members will reach an important agreement during the APEC gathering in Beijing to push forward the process of a Free Trade Area for Asia Pacific to achieve better regional economic integration.

China hopes the FTAAP will help integrate the many bilateral and multilateral free trade agreements that now exist between Asia-Pacific economies and reduce the risk of overlap and fragmentation.

The TPP and the RCEP (Regional Comprehensive Economic Partnership), led by ASEAN and favored by China, are multilateral agreements currently being negotiated.

While China has not yet been part of the TPP negotiations, the US is not participating or qualified to participate in RCEP talks because it would need to have a free trade agreement with ASEAN.

Schott believes that if China continues to move toward the TPP there will be a strong impetus to use it as the driver for Asia-Pacific economic integration.

"If for political reasons, both in Washington and Beijing, there is mistrust about how that will work, we will have to consider some hybrid approaches to bridging the Pacific, US and Chinese economic interests with perhaps an umbrella agreement that covers both TPP and RCEP provisions," he said.

He expressed optimism that the two countries will continue working more closely on trade, which will have political and strategic benefits for both.

Bill Krist, senior policy scholar of the Asia program at the Wilson Center, said he would like to see China join the TPP negotiations down the road, "but they have to agree to its high standards".

He also believes it's a good idea for US President Barack Obama to send a message to encourage China's participation when he visits Beijing.

Krist said he believes it is impossible to allow China into the negotiations at this point because the talks have already gone a long way between the 12 members. "But it's good if he (Obama) encourages China to come in and I hope he will listen to China's thoughts and concerns on what's going on. But for China to join at this point would be impossible," Krist said.

Bernard Gordon, professor emeritus at the University of New Hampshire, wrote an article in April that China should be brought into the TPP to maximize the impact of the partnership and to prove that it is not a strategy to contain China.

Gordon said that China has the ability to take steps that lead to TPP membership.

"Such a decision will not only be of major importance to the international economy, but just as important would be its importance to China itself," he said, citing China's ongoing reform agenda aimed at long-term competitiveness in the global economy.

"In a way that is reminiscent of China's decision more than a decade ago to join the WTO, the path today to continuing those reforms is to join the TPP," he said.

Gordon said he was encouraged that Vice Finance Minister Zhu had indicated China's continuing interest in the TPP.

chenweihua@chinadailyusa.com

(China Daily 11/10/2014 page37)