THE TTALK QUOTES 

On Global Trade & Investment

 

Published Three (Sometimes Four) Times a Week By

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No. 13 of 2014 

FRIDAY, FEBRUARY 14, 2014     

 

   

Filed from Portland, Oregon    

     

Click here for yesterday's quote from Daniel Ikenson.
COMPETITORS IN THE GLOBAL CLASSROOM

"... Western powers are avoiding direct confrontation with Beijing while pursuing relationships and policies that will limit its ability to bend the international system to its will. ...

"The goal of these new arrangements is not to push China out of international trade but rather to set the rules of the road without China and then force it to accept them."

Mark Leonard
September/October 2013
CONTEXT
Yes, the date is somewhat imprecise.  The quote is from an article Mr. Leonard wrote for the September/October 2013 issue of Foreign Affairs.  Mr. Leonard is Co-Founder and Director of the European Council on Foreign Relations (among other things).  The full title of his article is:

Why Convergence Breeds Conflict - Growing More Similar Will Push China and the United States Apart.

And the ellipsis in the above quote, the missing bit, is a paragraph describing both TPP and T-TIP, respectively the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership.  The title conveys the thesis well enough but leaves out the enriching details.  Here are three examples just from the first page:

"[U]ntil relatively recently, China and the United States got along quite well - precisely because their interests and attributes differed."

"Today's competition has more to do with status than ideology."

"... [T]he more similar China and the United States become, the less they like each other.  Freud called this 'the narcissism of small differences.'"

Mr. Leonard describes China as less narrowly focused on economic growth and more willing to pursue an aggressive foreign policy and President Obama as "trying to hide the shortfall in American resources."    The issues of the South China Sea get honorable mention in his discussion of China's more assertive foreign policy.  (How could they not?)  Understandably, the article doesn't deal with more recent issues like China's threatened new Air Defense Identification Zone, but it does refer to commercial actions in support of territorial claims against Japan in 2010 and the Philippines in 2012.  The first, of course, was the temporary halt of shipments of rare earths to Japan, and the second involved cutting back on purchases of fruit from the Philippines.

COMMENT
Surely there is nothing but coincidence to be read into the fact that this is Valentine's Day and the U.S. Secretary of State, John Kerry, is in Beijing, where some of these same issues were on the table.   Discussing the South China Sea controversies at his press availability today, Secretary Kerry said, "We encourage steps by everybody - not just China, by all parties - to avoid any kind of provocation or confrontation and to work through the legal tools available."

We will leave it to others to reconstruct and then parse today's segment of the U.S.-China dialogue.  We mention it simply as an up-to-date reflection of what Mr. Leonard was writing about several months ago.  And we have highlighted Mr. Leonard's Foreign Affairs article because it packages the major trade initiatives along with the geopolitical discussion of the U.S.-China relationship.  That is not always done and with good reason.  We ourselves much prefer to argue the case for trade deals in their own terms, that is, in terms of the benefits of specific agreements for the parties to those agreements.  But the broader issues are always there.

And with the American trade agenda now in some doubt, we are beginning to wonder why we are not hearing more warning voices from the foreign policy community. 

Perhaps it is because there is no problem.  In his Wall Street Journal column today, John Bussey suggested that, really, even Senate Majority Leader Harry Reid wants to get the trade deals done.  As for the timing issue, Mr. Bussey reassuringly quoted Scott Miller of CSIS saying that "For companies, TPP isn't in the near-term business plan."

Maybe not, but it is worth considering that the longer it languishes, the longer it is a hostage to fortune and the whims of China's bureaucracy.   China is an extremely important trading partner for all but one of the countries in the TPP negotiations.  Should China wish to disrupt or slow down TPP, she would only need to ask one very simple question, "Please, friends, may we join you?"
SOURCES & LINKS
Note on TPP Participants' Trading Partners.    In 2012, China was the number one trading partner for Australia, Chile, Malaysia, Peru, Vietnam, and Japan.  That's six of the 12.  For all but one the others, it was the second or third most important (third for the United States, counting the EU as one).  The exception is Brunei where trade with China ranks further down the list.

Why Convergence Breeds Conflict is the article by Mark Leonard that was the source for today's quote.  This is a link to that article on the web.

Secretary Kerry in Beijing takes you to the transcript of the Secretary's press availability earlier today.  While this link is to a page on the State Department website, we should point out that we would have missed this but for the indefatigable Chris Nelson of The Nelson Report.

Bussey's Upbeat Report is a link to John Bussey's column in today's Wall Street Journal.
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