Fran O'Sullivan: China looms large at TPP

China may yet surprise by seeking to join TPP. Photo / Getty
China may yet surprise by seeking to join TPP. Photo / Getty

China may not have been in the room for the Trans Pacific Partnership negotiations but it loomed large over the trade ministers' thinking.

Before the ink was barely dry at today's signing ceremony, US President Barack Obama played his 'China hand' saying TPP would give the United States an advantage over other leading economies - namely China.

"TPP allows America - and not countries like China - to write the rules of the road in the 21st century, which is especially important in a region as dynamic as the Asia-Pacific," Obama said.

But while Obama was indulging in a bit of Whitehouse triumphalism - he still has to get TPP ratified by Congress after all - US Trade Representative Mike Froman was giving a more nuanced view at the press conference at Sky City.

When I asked Froman if China would one day come "into the tent" of the 12-nation pact, he said the TPP was not directed against any particular country but towards setting high standards for the region.

"We're continuing to work with them (China) whether it's through our bilateral dialogues or through the negotiation of a high-standard bilateral investment treaty to ensure that they are also hitting high standards and that we have a strong rules-based trading system here in the region," Froman added.

It was left to Australia's Andrew Robb to put TPP into a broader context by suggesting that together with the parallel Regional Comprehensive Economic Partnership (RCEP) negotiations, which include China, a strong platform could be built for a unifying set of trade rules in Asia-Pacific.

"When you remove the noodle bowl of bilateral rules, which have worked effectively as the foundations for the TPP and I think will again work as the foundations for RCEP, to make that into one set of seamless trading rules across the region, it reduces the cost, it makes it a lot easier to trade, it increases certainty for exporters and importers and it is really a very strong objective that we're all ultimately heading for," Robb said.

Malaysia's Mustapa Mohamed acknowledged there were fears, including in Malaysia, that TPP could jeopardise various nations' trading relationship with China, which was either their biggest trading partner or one of the biggest.

"To that our response has been that China is now our biggest trading partner and we don't see that changing in the next few years," he said "The way we look at it in Malaysia is that the TPP will bring the momentum for bigger trade opening-up in the region and of course, as you know, we are open to other countries coming on board."

China may yet surprise by seeking to join TPP and the Chinese Ministry of Commerce yesterday confirmed it was "weighing up" the possibility of joining. But irrespective both regional pathways look as if they will one day form the bed rock for a Free Trade Area of the Asia Pacific.

Debate on this article is now closed.

- NZ Herald

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Head of Business for NZME

Fran O'Sullivan has written a weekly column for the Business Herald since its inception in April 1997. In her early journalistic career she was a political journalist in Wellington and subsequently an investigative journalist who broke many major business stories including the first articles that led to the Winebox Inquiry in both NBR and the Sydney Morning Herald. She has specific expertise in relation to China where she has been a frequent visitor since the late 1990s. She is a former Editor of the National Business Review; has twice been awarded Qantas Journalist of the Year and is a multiple winner of the Westpac Financial Journalism Supreme Award.

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