November 25, 2016 1:00 pm JST
Guy de Jonquieres

Trump's TPP rejection does not make China the natural heir

The world has been quick to draw two conclusions from President-elect Donald Trump's announcement that he plans to pull the U.S. out of the planned 12-member Trans-Pacific Partnership. One is that the move will severely diminish America's influence in Asia; the other, that it is surrendering regional -- and ultimately, perhaps, global -- leadership to China. The first outcome seems highly likely. The second, however, is far from certain.

Though TPP is usually talked of as an economic arrangement it is, like many trade deals, at least as much political in inspiration and intent. The most substantive component of President Barack Obama's "pivot" to Asia, it was designed to strengthen existing U.S. ties in the Asia-Pacific region, forge new ones and draw regional countries together more tightly in the face of a rising China, which was not invited to join the club.

By abruptly pulling the rug from under TPP, of which Washington was the architect, Trump has sowed serious doubts abroad about U.S. intentions and about its reliability as an ally or partner, leaving policy makers in much of Asia confused and uncertain where to turn. As a result, a large political vacuum has opened up, which China has indicated it is eager to fill. But can it realize that ambition?

Beijing has already sought to stamp its influence on the region by establishing the Asian Infrastructure Investment Bank, to which 50 other governments have signed up, and launching the "One Belt One Road" initiative, a far-reaching, though still fuzzily defined, infrastructure project aimed at linking some 60 countries that would extend eventually to Europe and beyond. Now China plans to accelerate negotiations on the planned Regional Comprehensive Economic Partnership (RCEP), a rival to TPP that involves 15 other countries but excludes the U.S.

Enthusiasts of RCEP envisage it as the engine of future Asian integration: a vast free trade area, embracing half the world's population and generating a third of its economic output, that would supercede the messy "noodle bowl" of bilateral free trade agreements that have proliferated across the region in the past 15 years. However, transforming that vision into reality will pose a stiff test of Beijing's economic statecraft and diplomatic skills.

RCEP's members are economically extremely diverse and at widely differing levels of development: Singapore, the richest, has a per capita gross domestic product almost 50 times that of Cambodia, the poorest. Those gaps have complicated the task of setting a negotiating agenda. For instance, Japan and South Korea want strong rules to protect intellectual property rights. However, their demands are opposed by poorer countries led by India, which fears they could cramp the growth of its large generic drugs industry and has in any case long been lukewarm -- and sometimes obstructive -- towards international trade liberalization.

Such divergences seem likely to limit what can be achieved. While all TPP members agreed to broadly similar standards and rules, RCEP aims for a piecemeal approach that allows members the flexibility to choose which commitments they sign up to. One result will be to inhibit liberalization of services markets, which are growing rapidly but remain heavily protected in much of Asia.

How far China will go to lower its own trade barriers is unclear. President Xi Jinping has pledged to work for more open trade and investment. Yet countries such as Australia which have cut trade deals with Beijing, complain that China has not always delivered on its side of the bargain. Most Swiss companies operating in China said, 18 months after a free trade agreement between the two countries took effect, that it had made no difference to them.

In addition, politics threatens to overshadow RCEP. Jealous national rivalry, historic grievances and mutual suspicion lie close to the surface in much of Asia. America's long-standing alliances and its role as guarantor of regional security enabled it to paper over those differences and coax and cajole fractious or recalcitrant Asian countries into agreeing on TPP. But with the project apparently doomed and the future of U.S. Asia policy highly uncertain, old animosities may well break through again.

The most obvious point of friction is between Beijing and Tokyo, which are already at loggerheads over the Senkaku/Diaoyu islands and have clashed in the past over RCEP's goals. Will Japan, under the assertively nationalistic leadership of Prime Minister Shinzo Abe, now be prepared to sit back and let China occupy the driving seat in the RCEP negotiations?

Beijing's dreams of achieving pre-eminence and expanding its influence in the rest of Asia face other hurdles and uncertainties, too. Doubts about its intentions linger in New Delhi, which also aspires to regional leadership, despite the two countries' recent efforts to bury old quarrels and co-operate more closely. China's increasingly aggressive assertion of claims over the South China Sea has divided the 10-member Association of South East Asian Nations and provoked resentment in many countries, which its periodic charm offensives have failed to calm. In much of the region, acute awareness of economic dependence on China sits uncomfortably with fear of falling under its control.

If Beijing is to meet those challenges, it needs to reflect on why the U.S. has been able, for seven decades, to hold sway in much of the region. America's military superiority and deep pockets were only part of the explanation. Other, more intangible, factors were arguably more important.

First, effective leaders need willing followers. The U.S. commanded them in Asia through a network of alliances and other ties that grew out of its history, first as liberator of the region from war and later as promoter of its economic growth and guarantor of its security. Second came trust. For all of their differences with Washington and periodic resentment at its policies, Asian countries invested more confidence in the U.S. than in any other nation as a constant in a fast-changing and potentially unstable world.

Third was the ability of the U.S., at the height of its power, to look beyond short-term self-interest and accept that leadership requires a willingness to shoulder costs -- financial, economic, military and political -- in the name of higher goals. Finally, the U.S. effectively deployed soft power, by projecting national values, principles and ideals that others identified with and aspired to share.

Trump's election and the profound popular unease it reflects about America's condition and its role in the world signal that those days are drawing to a close. From now on, the U.S. looks set to become a still more divided, inward-looking and discontented nation at home and a more unpredictable, self-interested and possibly unstable force abroad.

China, however, possesses none of the attributes that underpinned U.S. global pre-eminence. It lacks allies, other than North Korea. It inspires little trust, in its own neighborhood or in the wider world. Its policies, which have grown increasingly nationalistic under Xi Jinping, are subordinated to the overriding objective of preserving its ruling Communist Party's monopoly on power; and its energetic efforts to project soft power often fail to resonate abroad -- partly because China displays little empathy with the sensitivities of those living beyond its borders.

It is nonetheless unsurprising, indeed probably inevitable, that Beijing should seek to capitalize on America's muddled state and exploit it to its own advantage. By doing so, it may succeed in making economic and political gains at U.S. expense. But unless it shows that it understands better what effective international leadership requires, it would be a mistake to assume it will slip smoothly or naturally into the mantle that the U.S. now seems intent on discarding.

Guy de Jonquieres is a senior fellow at the European Centre for International Political Economy, a Brussels-based think tank, and a former world trade editor at the Financial Times.

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