The biggest trade deal in history was signed yesterday, yoking 12 Pacific rim countries in a US-led initiative aimed at wresting influence from booming China.
The ambitious Trans-Pacific Partnership (TPP) aims to slash tariffs and trade barriers for an enormous 40 percent of the global economy — but pointedly does not include Beijing.
“TPP allows America — and not countries like China — to write the rules of the road in the 21st century,” US President Barack Obama said after the pact was signed in New Zealand.
Photo: AFP
The deal — whose birth was fraught by domestic opposition in the US and in other key players, such as Japan — is a key plank of Obama’s so-called “pivot” to Asia, as he seeks to counter the rising power of China.
Along with a rebalancing of the US military machine toward the western Pacific, the TPP is recognition of the growing might of China, which has come to dominate the region, threatening US influence.
Supporters of the deal say harnessing the power of free trade in such a dynamic part of the world is vital if the US is to fend off China’s challenge to its supremacy.
Trade ministers from 12 participating countries — Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam — signed the pact in Auckland early yesterday.
Beijing was muted in its reaction to the deal, saying its officials were studying the 6,000-page document.
China’s Ministry of Commerce statement said Beijing would “actively participate in and facilitate highly transparent, open and inclusive free-trade arrangements in the region.”
Despite Obama’s comments, the US has also sought to play down any overt anti-China rhetoric.
US Trade Representative Michael Froman said the agreement was “never directed against” any specific country and “it’s important to have a constructive economic relationship” with China.
Although the signing marks the end of the negotiating process, member states still have two years to get the deal approved at home before it becomes legally binding.
“We will encourage all countries to complete their domestic ratification processes as quickly as possible,” New Zealand Prime Minister John Key said. “TPP will provide much better access for goods and services to more than 800 million people across the TPP countries, which make up 36 percent of global GDP.”
However, ratification may prove far from easy, notably in the US, where poisonous election-year politics are likely to stymie co-operation over a deal opponents have spun as a job killer.
In Japan — the second-biggest economy in the bloc — mainstream politicians and economists have generally supported the TPP as positive for Tokyo’s export-driven growth, despite concerns over its impact on its prized agriculture industry.
The Canadian government, which has changed since the deal was negotiated, signed up yesterday, but has yet to decide whether to go through with ratification.
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