Passage of a sweeping 12-nation Pacific Rim trade agreement would cement U.S. influence in the region while providing a counterbalance for China’s growing economic power, a new report says.
The American Action Forum’s (AAF) report concludes that congressional passage of the Trans-Pacific Partnership (TPP) would give the United States the chance to strengthen its regional influence through trade agreements or face ceding more power to China across the Asia-Pacific region.
“TPP would secure continued U.S. economic influence in the Asia-Pacific, preventing China from replacing the United States as the predominant regional power in the Asia-Pacific and strengthening America’s global leadership,” said Heather Wilson, Jacqueline Varas and Rachel Hoff, authors of the report.
China is moving ahead with trade agreements, is investing in global infrastructure and is building up its military presence in the region.
“Opposing TPP opens the door for China to replace the United States as the predominant regional power in the Asia-Pacific,” wrote Hoff, the AAF’s director of defense analysis, Wilson, a former House lawmaker and president of the South Dakota School of Mines and Technology and Varas, a data analyst.
“Ultimately, that will hurt the domestic economy and foreign policy interests alike,” they wrote.
Since 2000, the value of U.S. exports to the Asia-Pacific had diminished while China’s has expanded its economy and reach throughout the region.
“In the past 15 years, the Asia-Pacific has seen troubling trends of a growing Chinese trade presence and a relative decline in U.S. economic influence,” the report said.
“TPP could reverse these trends by lowering trade barriers and solidifying trade relationships between the United States and regional partners,” they wrote.
President Obama is calling on Congress to pass the deal during the lame-duck session after the November elections.
But there is widespread doubt about whether the TPP will have enough support, especially in the House .
China is negotiating a Regional Comprehensive Economic Partnership (RCEP), a deal with 15 countries in Southeast Asia and the Pacific Islands, including seven TPP members.
Beijing also has launched the One Belt, One Road strategy that could provide upward of $4 trillion for global trade, investment and development and would further strengthen Beijing’s influence among a broad swath of nations from the Pacific to the Middle East and Europe, the report said.
“The development strategy challenges traditional conceptions of trade by presenting a global rather than regional or bilateral approach,” the report said.
In addition, the Asian Infrastructure Investment Bank, which would provide the financial structure to support One Belt, One Road, has already authorized $100 billion in loans for infrastructure projects in Asian countries.
On the military front, Chinese defense spending has increased fivefold over 15 years, a growing concern in the United States and among its regional allies.
“The rules for the future of commerce in the Asia-Pacific are being written. The only question is, who will write them?” the report said.
“Will the United States choose to play an active role and ensure the trade regime favors U.S. interests and allies? Or will the United States sit back and allow China to fill the vacuum?”