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U.S. should invite China to join TPP

Editor: Li Kun 丨CCTV.com

10-10-2015 16:54 BJT

By Yu Xiang, director, division of American economic studies, associate research fellow, Institute of American Studies, China Institutes of Contemporary International Relations(CICIR)

Top trade negotiators of the United States and 11 other Pacific Rim countries have reached a deal on the Trans-Pacific Partnership (TPP) free trade pact, which is hailed as a historic accord. US President Barack Obama emphasized the deal would eliminate or reduce more than 18,000 tariffs that participating countries impose on US exports.

The reduction of tariffs will lower prices for international consumers. According to the International Monetary Fund (IMF), the 12 TPP countries account for a combined GDP (Gross Domestic Product) of approximately $30 trillion, about 40 per cent of global GDP and a population of 800 million.

Although the deal still has yet to be ratified in all 12 countries, the TPP may likely become the law of the land. For some strategic analysts, the deal creates a huge economic annular zone or the “C” shape, China, the second biggest economy in the region as well as in the world is right in the gap of the “C” shape. The TPP represents the US pivot to Asia, intended to balance China’s rise.

The TPP seems to be a Cold War-style geopolitical stratagem. In order to inject a positive impetus to bilateral relations, the US should compromise on TPP.

According to the “Entering only with Invitation” principle, Beijing can only participate in TPP negotiations if invited. Therefore an invitation from the US can refute a perspective that the TPP is curbing China's rise. China's entrance would ensure that TPP becomes more inclusive.

Let’s not forget that one of the most important achievements during Chinese President Xi Jinping's first state visit to the US on Sept.22-25 had been to convince Washington on the significance of building a new type of major country relationship.

Xi invited the US to take part in the Asian Infrastructure Investment Bank (AIIB), and pledged to cooperate with the US on issues of common concern, dispelling Washington’s fears that Beijing is squeezing the US out of the Asia Pacific sphere of influence. It's time for Washington to take positive action on TPP.

Excluding China from international or regional trade arrangements is unrealistic. Although China has come to grips with a currency and stock market correction, the short term fluctuations won't change its status as one of the largest trading and economic powers for the many years ahead.

Currently, China is the world's second-largest economy and the largest exporter. China should be included in the TPP, it would make a combined GDP stand at more than 50 per cent of global GDP.

Furthermore, China has signed numerous free trade agreements with other countries, including TPP member states. China and US Bilateral Investment Treaty (BIT) negotiations are accelerating as well.

Trade facilitating negotiations between Beijing and Tokyo remain under the framework of the China-Japan-South Korea free trade agreement. China has supported more negotiations with existing TPP participants, which could undermine the TPP's impact.

China is too important to be ignored and too large to be contained. The US should invite China to the TPP as soon as possible. This would symbolize a “second opening up” for the nation after gaining entry into the World Trade Organization. Beijing’s trade interests are also in line with US interests.

The Chinese Commerce Ministry announced recently that Beijing is “open to any mechanism that follows World Trade Organization rules and boosts economic integration of the Asia-Pacific”. Additionally, China may take defensive measures, if it feels isolated from the TPP sphere. Such actions could destabilize the region.

Parallel free trade agreements, such as the TPP and those signed by China, would lead to further fragmentation of trade in Asia and in the world with some countries feeling economically or politically forced to take sides between Beijing and Washington.

 

( The opinions expressed here do not necessarily reflect the opinions of Panview or CCTV.com. )

 

 

Panview offers a new window of understanding the world as well as China through the views, opinions, and analysis of experts. We also welcome outside submissions, so feel free to send in your own editorials to "globalopinion@vip.cntv.cn" for consideration.

Panview offers an alternative angle on China and the rest of the world through the analyses and opinions of experts. We also welcome outside submissions, so feel free to send in your own editorials to "globalopinion@vip.cntv.cn" for consideration.

 

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