How Washington’s Asia pivot and the TPP can benefit Sino–American relations

Author: Patrick Mendis, George Mason University.

In November 2011, President Obama embarked on an unusually lengthy ten day tour of the Asia Pacific during which he met with over 25 heads of state, reiterating America’s commitment to and presence in the Asia Pacific and, most significantly, reaffirming the new Trans-Pacific Partnership (TPP).

The TPP aims to create a tariff-eliminating, free trade zone through a network of expansive trade agreements with eligible Pacific Rim economies. Launched in 2006 as a free trade pact between Brunei Darussalam, Chile, New Zealand and Singapore, the TPP has expanded to include negotiations with the Australia, Malaysia, Peru and Vietnam. It forms a key part of the Obama administration’s new ‘Asia pivot’ policy, which calls for a shift of security priorities from the Middle East and Europe to the Asia Pacific.

Yet China, the world’s second-largest economy and Asia’s dominant economic and trading power, is noticeably absent from the TPP. China views the TPP, and other aspects of the Washington’s pivot strategy (including the US Marine’s revived presence in Australia and strengthened ties to countries such as Indonesia, the Philippines, Singapore, Thailand, Japan, South Korea and Taiwan) as part of a new containment policy not unlike that employed against the former Soviet Union. According to state-run Chinese Xinhua news, American intervention in South China Sea disputes is seen as part of a set of ongoing ‘provocative moves’ under the guise of freedom of navigation. Overseas, Obama’s Asia pivot has also played out as a clear attempt to comprehensively contain China and to counterbalance a perceived China threat.

But Washington’s pivot strategy is better understood within a new framework of mutually assured prosperity (MAP) — a twist on the Cold War containment practices backed by a doctrine of mutually assured destruction (MAD).

First, at present, strong interdependent economic relations exist as importer–exporter, debtor–creditor and consumer–producer between the United States and China. This already forces the two countries to caution and resort to trade diplomacy within the WTO framework, rather than retaliatory competition or military threats to resolve differences.

Second, Sino–American trade and commercial history suggests that convergence between the two largest economies — intensifying indirectly and multilaterally through the TPP — may instead solidify this existing symbiotic economic relationship. Since America’s founding, commerce has been the uniting factor among states and with foreign nations. To achieve Thomas Jefferson’s vision of an ‘Empire of Liberty,’ Alexander Hamilton devised an ingenious strategy that entailed a strong manufacturing base, a national banking system, the centralised federal government and an export-led economic and trade scheme protected by the US Navy. Similarly, Deng Xiaoping’s export-led liberalisation of Chinese economic policy also implicitly recognised the role of trade and commerce as a unifier of peoples.

There are three dimensions to the new MAP framework — geopolitics, geo-economics and geo-security — intertwined to the extent that the lines of distinction between each are blurred. Geopolitically, Washington’s re-engagement with the Asia Pacific after a decade of distraction is not so much a paradigm shift as the revival of a traditional and historic role. Since the Cold War, the United States has underwritten the regional security architecture through bilateral ties with allies such as Australia, Japan, South Korea, the Philippines and Thailand. In recent years as South China Sea tensions have intensified, Beijing’s perceived use of force in its own neighborhood causes weaker states to question the necessity of its current status as a regional hegemon, and to look for a balancer. America’s return to the Asian region reassures stakeholders that China will not overwhelm its neighbors.

Economically, through trade engagement and transparency via the TPP, Washington affords smaller countries the opportunity to collectively rebalance asymmetries in bilateral trade with China without undermining China as a valued and vital trade partner. This simultaneously eliminates the need for naval competition, reducing the likelihood of hostile engagement over South China Sea disputes of the so-called gunboat diplomacy sort — a term often applied to Washington’s historically preferred method of advancing foreign trade policy objectives in Asia.

Meanwhile, from a security perspective, China will be able to continue to prosper from regional stability. The expansion of Chinese military capabilities and the establishment of ports of call for PLA Navy ships will seem less threatening if the US Navy is engaged in the region in a cooperative, multilateral fashion, avoiding direct confrontation but implicitly projecting the show of force without war to restrain the adversarial behaviour. This may give China the space to ease into its role as the dominant — but not domineering — regional power in a way that will best serve its own economic growth and national security interests. It is also the finest insurance policy for China that holds over $1 trillion worth of American treasury securities.

Ultimately, a regional TPP-led free trade zone is the best ‘pacifying’ security architecture for long-term stability between the two economic superpowers in the Pacific Ocean. The TPP will deliver benefits for individual restraint between the two power centres, and may advance regional development, encourage the integration of the Chinese economy, and allow surrounding nations to hedge their bets on (and therefore contribute to) China’s ‘Peaceful Rise.’ In the Asian century, alliances are complex, and multilateralism and flexibility are the new currency. This era of Sino–American relations will require measured diplomacy.

Patrick Mendis is Senior Fellow and Affiliate Professor at the School of Public Policy, George Mason University.