Trade agreements and strategic rivalry in Asia

Abstract

The Asia Pacific is currently beset by two contradictory trends: growing economic interdependence and deepening strategic rivalry. Amidst these trends, new sets of regional trade agreements are being negotiated, primarily the Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP). This article argues that these proposals represent a third phase of competitive regionalism in the Asia Pacific, which will be more complex than the previous two rounds. This complexity is driven by two factors: this time, rivalry is not over scope or leadership but regional order; and this time there is a greater number of leading players in the rivalry.

Keywords:

• Asia Pacific
• competitive regionalism
• economic interdependence
• trans-pacific partnership
• regional comprehensive economic partnership

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1. The ASEAN Economic Community is touted by that organisation as the most ambitious economic integration blueprint yet attempted; envisaging: (1) a single market and production base; (2) a highly competitive economic region; (3) a region of equitable economic development; and (4) a region fully integrated into the global economy. The AEC areas of cooperation include human resources development and capacity building; recognition of professional qualifications; closer consultation on macroeconomic and financial policies; trade financing measures; enhanced infrastructure and communications connectivity; development of electronic transactions through e-ASEAN; integrating industries across the region to promote regional sourcing; and enhancing private sector involvement for the building of the AEC. In short, the AEC will transform ASEAN into a region with free movement of goods, services, investment, skilled labour, and freer flow of capital.

2. Trilateral discussions have been underway since 2008, including four rounds of trade negotiations. While details of the negotiations are secret, media reports claim they cover tariff reductions and facilitating services trade and investment.

3. While the details of the TPP negotiations are secret, the US Trade Representative's Office reports that they include competition, co-operation and capacity building, cross-border services, customs, e-commerce, environment, financial services, government procurement, intellectual property, investment, labour, legal issues, market access for goods, rules of origin, sanitary and phytosanitary standards, technical barriers to trade, telecommunications, temporary entry, textiles and apparel, trade remedies.

4. RCEP negotiations encompass trade in goods and services, economic and technical issues, intellectual property and investments, and dispute settlement mechanisms.

5. Hence the vociferous opposition of Singapore to Australian Prime Minister Kevin Rudd's proposed Asia Pacific Community, which showed a preference for an (albeit inclusive) Asian Concert of Powers.