China and US take fresh views on TPP and AIIB

China Daily (Canada) - - FRONT PAGE - By CHEN WEI­HUA in Wash­ing­ton chen­wei­hua@chinadailyusa.com

China is adopt­ing a more wel­com­ing at­ti­tude for the Trans-Pa­cific Part­ner­ship (TPP), a US-led free-trade agree­ment now be­ing ne­go­ti­ated by 12 coun­tries.

Zhang Jian­ping, direc­tor of the depart­ment of in­ter­na­tional eco­nomic co­op­er­a­tion at the In­sti­tute for In­ter­na­tional Eco­nomic Re­search of the Na­tional Devel­op­ment and Re­form Com­mis­sion, said China’s at­ti­tude is clear.

“That is we are very happy to see those TPP mem­bers can make con­sen­sus, be­cause we think TPP will be a pos­si­ble ap­proach for pro­mot­ing Asi­aPa­cific eco­nomic in­te­gra­tion,” Zhang said at a sem­i­nar on Tues­day at the Cen­ter for Strate­gic and In­ter­na­tional Stud­ies (CSIS) in Wash­ing­ton.

His words came at a time when the Obama ad­min­is­tra­tion is try­ing to pres­sure the House of Rep­re­sen­ta­tives to pass the fast-track Trade Pro­mo­tion Author­ity (TPA) needed to ne­go­ti­ate TPP and other free-trade agree­ments.

The bill cleared the Se­nate on May 21, but in the House, Obama still is lob­by­ing his own Demo­cratic Party’s Congress mem­bers.

The US and Ja­pan are still hag­gling over the open­ing of the auto and agri­cul­tural mar­kets un­der TPP, while Malaysia and Viet­nam face some ma­jor hur­dles in the ne­go­ti­a­tions.

Kathy San­tillo, re­gional man­ag­ing direc­tor of the USASEAN Busi­ness Coun­cil, said on Tues­day that there is no crys­tal ball as to whether the TPP can meet the dead­line. The Obama ad­min­is­tra­tion hopes to make TPP his ma­jor pres­i­den­tial le­gacy.

While say­ing that TPP might be a pos­si­ble ap­proach to the Free Trade Area of the Asia Pa­cific (FTAAP), Zhang noted that coun­tries such as China and In­done­sia may not feel so com­fort­able with TPP.

TPP’s high stan­dards and strict reg­u­la­tions to some ex­tent may sur­pass the devel­op­ment stage for some de­vel­op­ing economies in the re­gion, ac­cord­ing to Zhang.

“That’s why now we are mak­ing ef­forts to pro­mote RCEP (Re­gional Com­pre­hen­sive Eco­nomic Part­ner­ship),” he said, adding that de­vel­op­ing economies may pre­fer the RCEP track.

Zhang be­lieves the third pos­si­ble track to FTAAP will be for TPP and RCEP to work to­gether into a new tem­plate.

China ac­tively pro­moted a roadmap for the FTAAP when it hosted the APEC sum­mit last Novem­ber.

Matthew Good­man, se­nior ad­viser for Asian eco­nomics at CSIS, said there are some nar­row ques­tions, such as how to get the Repub­lic of Korea, the Philip­pines and oth­ers to ex­press in­ter­est in TPP.

“The big ques­tion is how do we get China and In­done­sia on board?” he said. “How do we move from that to an FTAAP?”

Ad­mit­ting that China needs to re­form and open up fur­ther to meet the TPP’s high stan­dards, Zhang said China is mak­ing a lot of ef­forts to pro­mote and cre­ate a re­gional trade net­work.

China is now the world’s largest ex­porter, the sec­ond­largest econ­omy and a global man­u­fac­tur­ing hub. Just in the past few months, China con­cluded free-trade agree­ments re­spec­tively with Australia and South Korea.

Zhang in­di­cated that China also has been dis­cussing free­trade agree­ments with coun­tries such as Sri Lanka, Is­rael and those for­mer Soviet re­publics, largely un­der China’s Road and Belt Ini­tia­tive, orig­i­nally known as One Road and One Belt for eco­nomic in­te­gra­tion.

He said China is fac­ing a crit­i­cal pe­riod of eco­nomic tran­si­tion af­ter de­mo­graphic div­i­dends end five or 10 years from now, adding that the new driv­ing force will come through in­no­va­tion, re­form and open­ing up.

He praised some Euro­pean na­tions for mak­ing a smart choice to join the Asia In­fra­struc­ture In­vest­ment Bank (AIIB). He said that given that China is a mem­ber of the World Bank and the Asian Devel­op­ment Bank, he hoped in the fu­ture that Ja­pan and the US can be mem­bers of AIIB.

The US has widely been seen as try­ing to block the AIIB by lob­by­ing its key al­lies not to join the China-ini­ti­ated bank. But Kurt Tong, prin­ci­pal deputy as­sis­tant sec­re­tary of the Bureau of Eco­nomic and Busi­ness Af­fairs at the US State Depart­ment, dis­agreed on Tues­day.

“The United States is ex­cited about this prospect,” he said. “We are not an­gry; we are not mad, churl­ish or surly about it.”

Zhang Jian­ping, direc­tor at NDRC In­sti­tute for In­ter­na­tional Eco­nomic Re­search

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