Among the many follies that shaped the four years of President Donald Trump’s work, one flaw in thinking stands out in particular: the idea of stopping China’s rise to world power with the help of a trade war and at the same time terminating the participation of the USA in the transpacific free trade agreement CPTPP. The pact, then known as the TPP, was once devised by the United States itself in order to bring together Asia, Oceania, North and South America more economically and to curb Beijing’s hegemonic drive. Instead, Trump decided to politically exploit the suspicions of many US citizens about trade agreements of all kinds and to score a cheap victory on points. The way has been clear for China since then.
How free is it these days: The People’s Republic has officially submitted the application to join the very trade alliance that was once conceived as a bulwark against itself. If that actually happened, China’s state capitalists would soon not only take over the leadership of the alliance, but from now on, like all members, would have the right to block any further accession – that of the USA or Taiwan, for example, which has already been applied for. For Washington that would be an economic and security disaster.
In order to forestall Beijing, Trump’s successor, Joe Biden, should actually immediately start talks with the eleven CPTPP countries about whether the one-time co-initiator USA should join the country. But he lacks the support for this, because such agreements are still extremely unpopular in parts of his Democratic Party. They are considered job killers, a free ticket for corporate interests and a prime example of opaque government banter. It ignores the fact that free trade agreements benefit companies, and above all the citizens of the participating states, if they are well designed.
Beijing knows that the US president is politically paralyzed
As long as Biden’s domestic economic and social reforms are not implemented, he will refrain from anything that turns the left wing of the party against him. Of course, Beijing knows that, which is why the timing for the CPTPP membership application was deliberately chosen: The US President is politically paralyzed, his counterpart Xi Jinping has more time to advertise his initiative to the previous member states.
Now, of course, one could get the idea in Washington of just sitting it out and hoping that China’s efforts will fail. That would be quite conceivable, because the People’s Republic is miles away from fulfilling the CPTPP accession criteria on key issues such as employee rights or dealing with state-owned companies. Some member states also fear that China will dominate; Beijing has recently engaged in violent political skirmishes with others, such as Canada.
And yet such a strategy by Washington would be a Vabanque game, because criteria are one thing, fundamental considerations another: With the exception of Canada and Mexico, China is the more important trading partner than the USA for all eleven CPTPP countries. If Beijing joined and opened its markets to the new allies, this advantage would gain in importance.
Biden has to signal that the US is still ready to join
So what could Biden do? Since there are close US allies like Australia and Japan among the previous members of the free trade area, the president will long ago sound out behind the scenes how great Beijing’s chances of accession are. At the same time, it should signal that the United States for its part is ready to participate if the treaty were modernized, especially with a view to the fight against climate change, better labor rights and digital trade. That could also be sold as a success in one’s own party.
In any case, simply watching is not an option, because as long as the US is not at the negotiating table, its influence is at or near zero. If China managed to become the twelfth member of the trade zone, that would not only mean that Washington’s close allies would be drawn even more strongly into the orbit of the People’s Republic. Rather, it also meant that essential world trade rules of the 21st century would ultimately not be written in Washington and Ottawa, Tokyo or even Brussels. But in Beijing.