The Trans-Pacific Partnership: Japanese Strategic Diplomacy or Chinese Containment

Abstract

The role and shape of international trade agreements is changing. No longer simple devices for easing the movement of goods across borders, it is becoming both an instrument of integrated economic regulation at the supra national level and a tool of international relations within the emerging global economic order. The recently expanded scope of negotiations over the Trans Pacific Partnership (TPP) serves as a case in point, one that focuses both on the trilateral relations between Japan, the United States and China, and on the form of competition for control of the language of supra national economic regulation. The focus of this paper is on one critical new aspect of Japanese trade relationships that is likely to have significant economic and geo-political effects — the decision by Japan to join the U.S. led negotiations for a Trans Pacific Partnership (TPP), even as it pushes ahead with a Free Trade Agreement with China and Korea. I will first describe the TPP from its genesis as an effort by Brunei, Chile, New Zealand and Singapore to better integrate their economic relationships into current efforts to create a powerful free trade area of the Pacific that excludes China. I will then suggest some important strategic considerations that may follow from this important decision in the relationships between Japan, the U.S. and China, with emphasis on the way in which this affects contests for control of international rulemaking within the structures of economic globalization. For Japan TPP may represent containment within complex networks of multi lateral arrangements that protects its sizeable investment in China, at least temporarily, and permit it to leverage its power to influence global trade rules. For the U.S. TPP presents an opportunity to leverage power as well, by creating an alternative to WTO for moving trade talks forward in ways that serve U.S. governance interests in a more comprehensive way. For China, TPP represents an additional layer of containment, meant to constrain its economic power and to limit the value of its form of state capitalism. TPP represents the next wave of plurilateral comprehensive agreement that will shape the framework of global economic governance. It also suggests the growing importance of international agreements as the space within which the structures of economic regulation will be determined, to the detriment of state power. Within these structures TPP also reaffirms that Japan stands uncomfortably close to the fissure that separates U.S. from Chinese interests, and must continue to rely on the internationalization of rulemaking to protect its interests. An independent path for Japan is unlikely to be an option worth considering.