05.06.2014 Author: Vladimir Terehov

Trans-Pacific and Trans-Atlantic “Partnership” – A New Global Game

5613The situation surrounding the creation of two of the largest integrated projects, the Trans-Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Partnership (TTIP) remains unclear. This ambiguity stems from the fact that the very genesis of these projects come from within the political sphere and not the economic sphere. This is despite the fact that the declared goals for any future association (the removal of tariff barriers and the free flow of goods, services and investment) are determined by economic factors.

Together with the existing North American Free Trade Zone (North American Free Trade Agreement – NAFTA), TPP and TTIP (in the event the latter two associations are successfully created) will cover more than half the globe’s surface and almost all of the developed world, which together are usually denoted the rubber category of the “West”. These circumstances unmistakably show that the main “promoter” of all three of these projects, the United States, as the only power whose political aspirations seem to be global in nature.

Strictly speaking, political motives were already evident during the creation of NAFTA. Its creation in the early ‘90s, which included Canada, Mexico and the United States, was a response by Washington to the integration processes occurring in Europe, as well as to the prospect of the EU emerging into an independent geopolitical player.

The same political motivation can be seen in 2008 with the United States implementing what was then a very modest project, TTP. The exact nature of the negotiations on founding documentation of TTP was reached in late 2010. Since then, in a different format, they have been carried out with the participation of 12 countries in East Asia (Brunei, Vietnam, Malaysia, Singapore and Japan), the Americas (Canada, Mexico, Peru, U.S. and Chile), as well as Australia and New Zealand. Moreover, in the first two years, Japan has participated as an observer, but as of March, 2013 Japan became a member of the negotiating process. In the autumn of 2013 both Taiwan and South Korea have expressed their desire to join TPP.

Up until recently, the project TPP was considered in the U.S., within its main context, as counter-balance to China as a regional and global competitor. Some hints of a possible departure from the proposed goals of the TPP appeared with the beginning of Obama’s second term in office and the appointment of John Kerry, considered to be a moderate, replacing the more hawkish Hilary Clinton as Secretary of State. Moreover, last fall, U.S. presidential advisor on national security issues, Susan Rice did not exclude the possibility of China be included in TPP.

However, even considering this hypothetical situation, the prospects of a political component as motivation for the TPP will not disappear. It manifests itself in particular through one key problem, one which has not been overcome in three years. The fact of the matter is, Washington’s main strategic partner in Asia Pacific region, Japan, remains quite restrained in its views to this project.

Tokyo fears are completely understandable. And even though the prospect of removing trade barriers and the opening up of foreign trade markets for Japanese industry is enticing, it is without question that the unconditional entry into TPP presents Japan with some challenges. Most notably, Japan would risk losing control of their agriculture industry. It cannot compete with the U.S. cheap food production and from other member making up the association.

Nevertheless, the decisive factor in determining Japan’s current position in relation to TPP has more to do with politics than anything else. Needing Washington’s support in its confrontation with China, Japan cannot ignore the military and political interests of its patron when it comes to joining the TTP project.

In actual fact, the fate of this very association is to be decided through bilateral US-Japanese negotiations. The remaining 10 participants of the TPP act as extras, mere observers. The results of more than two dozen meetings of authorized representatives of the parties at the ministerial level, which were conducted over the past three years, have consistently commented the same words again and again: “noted convergence of positions” and “the need to continue” the work of experts.

These phrases in particular were used in comments after a meeting held at the end of April, 2014 in Tokyo by President Obama and Abe, as well as at the follow-up ministerial meetings held in Singapore a month later. Once the Singapore meetings concluded there was expressed a hope that any disagreements would be overcome during 2014. But similar hopes were also expressed in 2011, 2012 and 2013.

In the context of the continuing problems with TPP, mainly attributed to US-Japanese differences, attention is drawn to Tokyo’s rather sharp intensification on concluding other free trade agreements. The main object of such activity in recent months became countries making up ASEAN (Association of South East Asian Nations), Australia and the EU. This is an important indication of Japan asserting itself as an independent political player on the world level and that they have their own interests which do not always coincide with American interests.

In a similar state of uncertainty remains the project TTIP, formed under significant influence of its predecessor TPP. TTIP involves two of the world’s leading small group of players, the very same United States along with the EU. The implication here is that in the ongoing geopolitical game, the EU remains as sort of quasi-subject, despite all its internal problems. At least that is the case for the short term.

It seems appropriate to note, starting almost a year ago, along with Vice-President of the European Commission, Catherine Ashton, regarding TTIP, John Kerry remarked rather significant words in that the U.S. has no intention on “withdrawing from Europe”. This phrase has been used in analytical assessments of the prospect of transatlantic relations almost immediately after the fall of 2011 by a well-known article about Hillary Clinton on the “shift” of key U.S. interests to the Asia Pacific region.

An important factor accompanying this “shift” became telling signs of the so-called problems of U.S. “imperial overheating”. The appearance of such signs became indisputable and evidenced, in particular, by the Minister of Defense, Chuck Heigl’s speech in the course Pentagon hearings on a draft defense budget for the fiscal year of 2015. (Secretary of Defense Speech, US Department of Defense, February 24, 2014.

Consequently, the cutting forces must be achieved from the less significant hot spots and regions, to which, besides Afghanistan, some analysts two years ago began to refer to Europe. At the official level, “withdrawal from Europe” was never stated, but it was not hard to “speculate” within the scope of the “shift” in the U.S. to the Asian-Pacific region. Results of this same speculative process could thus be the final nail in the coffin of transatlantic relations during the period of the Cold War.

To maintain at least something from these relationships, a year ago words were spoken as to the U.S. having no intentions on “withdrawing from Europe”. One indication of continued American involvement in European affairs, but not the most critical, is the ongoing Ukrainian crisis.

With the view, that the words of John Kerry not appear as a mere empty phrase, the project TTIP was launched. And as it now appears, without any weighty risk assessment, due to significant differences in the “social orientation” of the economies on both sides of the Atlantic, and already apparent Germany (EU Leader) emerging as one of the world’s leading political players.

The importance of Germany and the EU in global processes are manifested, in particular, in the fact that both the leading Asian players, China and Japan, are trying to “race” to increase their scale of relations with Europe. This is evidenced by the recent European tours taken by Yang and Abe within the span of one month. This means that Germany, along with the EU, has more reason to position itself as an equal party in the negotiation process with the United States in the conditions regarding the formation of the TTIP.

Finally, a new and important factor that could have a moderating influence on the integration of both projects is the tendency towards “re-industrialization” of the U.S. It is accompanied by a desire for a specific return on its territory as part of the production, which occurs primarily in developing countries.

In connection to this, attention is given periodically in the United States to sharp criticism over NAFTA, mainly in connection to Mexico’s membership in the association. The appearance of criticism and such strong expressions as “the process of de-industrialization” of the United States is caused partly by this very circumstance. But like many other countries, not only in the TPP, but also in the TTIP.

In conclusion, I’d like once again be note, that the uncertainty in the prospects for the implementation of both of these projects reflects a complex web of economic and political aspects of a big and contemporary geopolitical game.

Vladimir Terekhov is a leading researcher at the Center of Asia and the Middle East of the Russian Institute for Strategic Studies, especially for the online magazine “New Eastern Outlook”.


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