US Measures May Help China’s Economic Expansion Plans – The New Indian Express



On September 15, US President Joe Biden announced the formation of AUKUS, a new strengthened trilateral security partnership between Australia, the United Kingdom and the United States in the Indo-Pacific region. The President described AUKUS as “a partnership where our technology, our scientists, our industry, our defense forces all work together to provide a safer and more secure region that ultimately benefits everyone.” AUKUS is thus projected as a regional public good, but the three heads of government avoid evoking the reason for their rapprochement, namely the Chinese threat.

A priori, AUKUS appears to be a step backwards in the foreign policy of the Obama presidency, the culmination of which was the pivot towards Asia. However, there is one major difference. In addition to the strategic dimension, President Obama decided to create an economic space under American leadership by assembling the 12-member Trans-Pacific Partnership (TPP), which was abandoned by his successor, Donald Trump. In contrast, the foreign policy initiative of the Biden presidency in the Indo-Pacific rests solely on the creation of a strategic partnership; the critical economic dimension has been ignored, at least for now.

While the global media gave a lot of space to the formation of AKUS, they chose not to report a significant development that happened immediately after. Hours after the AUKUS announcement in Washington DC, China filed a formal application to join the Comprehensive and Progressive Agreement on Trans-Pacific Partnership (CPTPP), the trade agreement between 11 countries formed after the withdrawal of the United States of the TPP. China has long wanted to expand its economic presence in the Indo-Pacific and its candidacy for the CPTPP should be read in this context.

The most notable initiative to date has been taken during China’s 21-member Asia-Pacific Economic Cooperation (APEC) presidency in 2014, when it leveraged an earlier decision by the group to consider prospects for an Asia-Pacific Free Trade Area (APTA). China succeeded in getting APEC members to endorse the “Beijing Roadmap for APEC’s Contribution to the Achievement of the FTAAP”. But why did Beijing push for the FTAAP when two regional trade agreements, namely the Regional Comprehensive Economic Partnership (RCEP) and the TPP were being negotiated in the Indo-Pacific region? Indeed, these agreements hardly reflected Beijing’s ambitions; RCEP was led by members of the Association of Southeast Asian Nations (ASEAN), while TPP was shaped by the United States. However, as the FTAAP remains on the drawing board, President Xi Jinping made an important announcement at the APEC summit in 2020 that China would “favorably consider” joining the CPTPP.

There are justifiable reasons for China to join CPTPP, even though RCEP offers a large market, averaging nearly 32% of its total trade since 2014. This makes CPTPP more attractive to China compared to RCEP is that if the share of this latter group in its total trade had increased from nearly 34% in 2017 to 31% in 2020, its exchanges with members of the CPTPP had gone from 20% in 2014 to nearly 24% in 2020. In addition, the CPTPP offers China the opportunity to expand its footprint economy among non-Asian members of the grouping.

It may appear that China’s prospects of joining the CPTPP would be slim since most of its members have been close partners with the United States, having actively participated in the now defunct TPP. However, China’s bid to join the CPTPP was welcomed by Malaysia while Singapore and Japan argued that Beijing’s membership depends on its ability and willingness to accept the strict CPTPP rules. In addition, the Vietnamese government has agreed to share information regarding its CPTPP membership experience with China. Among the other members, New Zealand seems to have developed a privileged relationship with China, which is also its largest export market with a share of 30%. And Mexico is currently experiencing a diplomatic charm offensive from the Chinese leadership.

Even though China’s membership is supported by CPTPP members, the United States can spoil China’s chances by invoking the “poison pill” provision in the United States-Mexico-Canada deal. This provision requires that one of the three members of the Agreement consult the others if it wishes to enter into a trade agreement with a non-trading country such as China. However, commentators are divided as to whether the “poison pill” provision can harm China’s interests.

It is undeniable that by offering its own version of the “pivot to Asia”, which lacks a coherent economic strategy, the Biden administration would in fact be helping China achieve its long-term ambitions of economic expansion in the country. ‘Indo-Pacific. The Obama administration, aware that geography, economy and technology favored China in its competition with the United States, decided to forge an economic partnership agreement, namely the TPP, with several key partners, which could later be extended to others. like India. With China’s decision to join the CPTPP receiving more than the required support and interest from existing members of the group, the United States may well have lost the plot.

Biswajit Dhar

Professor, Center for Economic Studies and Planning, School of Social Sciences, JNU

([email protected])



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