Why Did "Noisy Guest" Dominate "Host" at Hawaii APEC Meeting?

At the recent Asia-Pacific Economic Cooperation Summit meeting in Hawaii, the original three major issues on the agenda were: “to deepen regional economic integration and expand trade, promote green growth and strengthen regulatory cooperation.” But from the very beginning of the meeting, the Trans-Pacific Partnership, originally not within the framework of the meeting, dominated the discussion. Afterward, throughout the entire meeting, the attention and discussion the TPP attracted exceeded that of any other subject. In fact, the TPP had a “noisy guest dominates the host” quality to it.

APEC Can’t Satisfy Members’ Expectations

The main reason why the TPP was able to dominate the meeting lies in the existing and continuously exposed problems in the APEC mechanism. APEC’s organizational structure includes an informal leaders’ conference, a ministerial meeting, a senior officials’ meeting, working groups, special topic task forces, etc., and every meeting is a massive gathering of the elite. But since the outcomes are voluntary and all decisions require every member country’s unanimous agreement, APEC’s operation is dilatory and inefficient, reduced to a talk-shop and unlikely to satisfy members’ expectations.

For America, the world’s most developed country and largest economy, APEC can’t satisfy the strategic demand to promote trade and investment liberalization. In the beginning, America hoped that APEC could realize the following goals: First, prevent East Asia from establishing its own regional economic or trade bloc; second, through the process of promoting East Asian regional trade liberalization, help American companies enter the East Asian regional market; third, use APEC to force Japan to open its market; fourth, through APEC, set up a regional security “multilateral foundation” to facilitate interactions with East Asia, particularly China and Japan.

But APEC’s development hasn’t advanced along the track that America initially designed; America’s above-mentioned goals haven’t been fully realized. Thus, America long ago began cooperating with other Asia-Pacific countries outside of the APEC framework. At the end of October 2002, America tossed out the “Enterprise for ASEAN Initiative,” and one after another negotiated or concluded free trade agreements with Singapore, Thailand, Malaysia, Australia, Korea, etc. Clearly, America wants to use these countries, through bilateral FTAs, implement the strategic, economic and security targets it can’t achieve through APEC.

At the same time, APEC has been unable to meet the other member nations’ expectations. Especially after the 1998 East Asian financial crisis, the construction of free trade zones that bypass APEC’s “one-on-one” system has flourished in the East Asian region, developing both quickly and smoothly. Since 1998, bilateral FTAs have sprung up in East Asia in large numbers. Some of the more important bilateral agreements already signed and implemented include Singapore and New Zealand (2000), Japan and Singapore (2002), Singapore and Australia (2003), Thailand and Australia (2004) and China and New Zealand (2008). In 2004, China and Australia began establishing bilateral free trade zone negotiations. China and Pakistan have signed a free trade agreement. In April 2005, while Chinese Premier Wen Jiabao visited India, the two parties decided to conduct a feasibility study on establishing a bilateral free trade zone, becoming the prelude for a future “China-India Free Trade Zone.”

Even more conspicuously, the 10 + 1 and 10 + 3 groups and the East Asian Summit, centered around ASEAN, are increasingly exceeding APEC in importance — especially the 10 + 1 free trade zone going into effect between China and ASEAN, which has had a wide ranging influence on the Asia-Pacific region and the entire world, both stimulating Japan to establish a free trade zone plan with ASEAN and opening up a similar path for 10 + 3, the East Asian Summit and the China-Korea-Japan FTA. Once these bilateral and multilateral FTAs enter every Asia-Pacific country’s field of view, who will still devote all their efforts to the construction of the APEC mechanism?

America Promotes TPP at All Costs

The TPP becoming the focus of this year’s APEC summit meeting was the result of America’s all-out push. This also bears witness to America’s still-existent immense prestige and strength. For the Obama administration, pushing the TPP has multiple significances and objectives.

In the short term, facing the imminent arrival of the 2012 presidential election, if America can set the framework for the TPP at this summit meeting and obtain a “great achievement,” it signifies an important foreign policy victory for the Obama administration, undoubtedly gaining points in the battle for the president’s reelection.

In the long term, America hopes that through leading the TPP, it can consolidate its leadership role in the Asia-Pacific region. During her speech in Hawaii, Secretary of State Hillary Clinton clearly stated that in the Asia-Pacific region, America is not engaging, but rather leading. As the hand that will manage future Asia-Pacific regional affairs and implement a new Asia-Pacific strategy, the TPP’s importance to America must be understood on a strategic level.

First, considering China-U.S. relations and the degree to which China has integrated with the global and East Asian economies, the TPP won’t deliberately or permanently exclude China. America’s goal lies in gaining the strategic initiative with China. Due to “benevolent neglect” resulting from being busy with global counterterrorism aims for the last few years, America has fallen behind China in participation and involvement in East Asian regional economic cooperation; in particular, the creation of the China-ASEAN free trade zone is an enormous stimulus for the U.S. Former U.S. Deputy Assistant Trade Representative Charles Freeman once said, “America thought China couldn’t possibly negotiate free trade agreements with ASEAN. It turns out they are making progress very quickly. We’re amazed!”* Thus, America urgently desires to change this situation. Equally important, because of America’s leadership position, according to the rules of the TPP, if China wanted to join in the future, America would hold the bargaining power, to be able to force China to make large concessions, reversing the structural trade deficit with China.

Second, adding icing on the cake of the U.S.-East Asian bilateral security alliance, it helps to advance the increasing trend toward multilateralism. Former U.S. Trade Representative Susan Schwab once said that countries that possess important geopolitical interest are America’s partners in establishing FTAs. Based on this kind of historical preference in establishing FTAs, in advancing the TPP, America will necessarily draw in its East Asian allies and quasi-allies. This is prominently reflected in America pressing Japan to join. If Japan joins the TPP, its effectiveness will spread outward from the alliance relationship founded upon the Japan-U.S. Security Treaty. As a solely security relationship, the Japan-U.S. alliance would be difficult to spread to the entire East Asian region, but thanks to the effect of the TPP, it’s tantamount to “leveraging” the Japan-U.S. alliance on a certain level.

To be sure, America will also urge Korea, the Philippines, Thailand and other allies to join. Between American allies — for example Japan and Korea, Japan and the Philippines, etc. — there isn’t a security alliance relationship, but if there is the TPP link, a substantial security relationship between these countries will arise to a certain degree. With an East Asian bilateral security alliance capacity, America will thereby make progress toward the hidden multilateral potential.

Although the fundamental principles of the TPP were decided at this year’s APEC summit, and there are plans to complete negotiations by August of next year, due to the TPP’s comprehensive and high standards, as well as the seeming separation from China and the unevenness of each member nation’s national power, scale and level of development, as well as their extremely complex domestic politics, the TPP’s future negotiation and establishment is certainly doomed to be messy. Whether the TPP and APEC will form a kind of “surpassed by an even greater rival” pattern is still up in the air.

(The author is an independent commentator in Jiansu, China.)

*Editor’s Note: this quotation, accurately translated, could not be verified.