Dr Dan Steinbock shared his insights on the The Trans-Pacific Partnership (TPP) suggestion, and his predictions on the future scenarios after its’ failure.
The White House’s effort to hammer the Trans-Pacific Partnership (TPP) agreement in Maui failed. As time is running out for President Obama’s legacy achievement, both Washington and Beijing are reassessing their options.
Washington’s objectives share a common denominator to extend current alliance arrangements in the (non-China) East Asia to South and Southeast Asia. These efforts are not easily achievable, due to regional and national policies.
The Association of Southeast Asian Nations (ASEAN) seeks to hedge between declining U.S. influence and rising Chinese participation. It does not favor the exclusive primacy of one or another large economy. The same goes for India.
Second, national policies work against containment policies. While South Korea supports the TPP, it has strong ties with China, an independent foreign policy and historical friction with Japan. In turn, Vietnam’s regional stance relies on U.S. clout but is counterbalanced by desire to sustain expansive economic ties with Beijing.
The TPP also comes with some economic negatives. In advanced economies, critics argue that it represents the interests of major multinationals’ private interests, at the expense of consumer welfare. In emerging Asian economies, the TPP rules transfer wealth to U.S. big pharma and Hollywood and are seen as “anti-development.”
Second, the TPP bloc is not inclusive. It excludes the three largest emerging economies of the 21st century: China (East Asia), India (South Asia) and Indonesia (Southeast Asia). That does not serve the future of the TPP, the region or the U.S.
Third, the TPP represents preferential rather than free trade and it is punitive to non-members. It may entrench protection in certain key areas, especially agriculture. And thanks to defensive geopolitical stances, current sheltered sectors – Japanese rice, U.S. sugar – may prove even more resistant to change.
As the TPP imposes standards and rules that are inappropriate to the stage of development of emerging economies, it has potential to freeze rather than speed up their development.
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Dr Dan Steinbock is an internationally recognized expert of the multipolar world. He focuses on international business, international relations, investment and risk among the major advanced economies (G7) and large emerging economies (BRICS and beyond). Altogether, he monitors some 40 major world economies and a dozen strategic nations, including all major nations in Asia.
Dr Steinbock has advised international organizations, government agencies, financial institutions, multinational companies, SMEs and family enterprises, competitiveness institutes and NGOs. He serves on media advisory boards (Fortune, Bloomberg BusinessWeek, McKinsey, etc). He gives economic and policy briefs for trade associations, government agencies and international think-tanks, chambers of commerce and financial intermediaries across the world.
He cooperates with think-tanks, and leading universities in the US, EU, China and India, ASEAN, the Gulf, Americas and Africa. He divides his time between the U.S. (New York), Asia (Shanghai), ASEAN nations, and occasionally Europe. He has been interviewed for Global Trends 2030 by the U.S. National Intelligence Council.