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Negotiations for three partnerships of unprecedented scale are currently in the works. The first is the Trans-Pacific Partnership (TPP). Discussions toward such a deal were launched in March 2010, and involved the United States together with 11 countries in the Asia-Pacific region.1 The deal was signed on 4 February 2016, but its ratification is, as of his writing, jeopardized by the election of Donald Trump. The second is the Regional Comprehensive Economic Partnership (RCEP), a proposed treaty involving the Association of Southeast Asian Nations (ASEAN) and six other Asian-Pacific countries â Australia, China, India, Japan, South Korea and New Zealand. Negotiations for RCEP began in May 2013. The third is the Transatlantic Trade and Investment Partnership (TTIP), between the United States and the 28 EU countries, whose negotiations began in July 2013 and had come to a halt at the end of 2016. Figure 1.1 displays the global economic weight of these three partnerships, if they are realized.
Along with these three partnership negotiations, the Trade in Services Agreement (TiSA), involving the European Union and 23 other countries,2 and the Anti-Counterfeiting Trade Agreement (ACTA)3 should also be noted. All these highly targeted mega-negotiations are taking place on the sidelines of the WTO, and they aim at least as much to establish market norms and standards as to liberalize markets. Everywhere they are bringing concerns, turmoil and criticism in their wake. One reason for this distrust is the close link of these negotiations to the globalization process. Another is that involving the great world powers as they do, their motivations are inevitably strategic as well as economic.
As the editors note in the introductory chapter, these new partnerships are not only exceptional for their economic significance and their regulatory scope, but also are a real challenge for global economic governance. This chapter focuses on just one of these partnerships, the TPP. Three arguments will be developed. First, by building a bridge between America and Asia, the TPP constitutes a strategic response by the US to regional developments in Southeast Asian integration. Second, these trade negotiations are designed to deepen the interconnection of value chains between the contracting parties. And third, in combining trade obligations with regulatory cooperation, the partnership aims not only to ensure the interoperability of national regulatory systems, but also to define new trade standards suited for increasingly fluid digital and transnational markets.
The United States: an interface between Asia and Europe?
The origin of these transpacific negotiations dates back to 2005, and the signing in that year of the Trans-Pacific Strategic Economic Partnership Agreement by the Sultanate of Brunei, Chile, Singapore and New Zealand. Commonly known as the P4, this treaty was a free trade agreement which included a specific chapter on cooperation â chapter 16, entitled Strategic Partnership. Its trade portion essentially covered the commerce in goods and services, public procurement, competition and intellectual property. Chapter 16 gave parties the possibility of reinforcing cooperation with one another through political dialogue, the exchange of information on practices, and the concluding of specific agreements â especially in the fields of economics, science, technology, education, culture and industry (raw materials). It allowed for an extension of cooperation to third parties, where there is mutual interest. This agreement also made provisions for negotiations on investment and financial services, to begin within two years of its coming into effect, scheduled for 1 January 2006. These further negotiations were launched in March 2008; and in September of that year, the US also decided to join, soon followed by Australia, Peru and Vietnam. Though the election of President Obama initially cast some uncertainty on American participation, the President (in November 2009) reaffirmed the United Statesâ intention not only to participate in the agreement, but to extend its reach as a model reflecting both the âeconomic priorities and valuesâ of the United States and its desire to take a hand in the construction of institutions in the Asia-Pacific region.4
TPP negotiations began in March 2010, and in October, Malaysia joined the group. In November 2011, during the APEC Summit in Honolulu, the nine participating countries presented a broad outline and road map of the negotiations. In June 2012, Canada and Mexico, initially left out of the loop, were invited to join. In April 2013, Japan was invited in. In this way, a negotiation originally intended modestly to complete a four-way partnership morphed into a negotiation of twelve parties aimed at nothing less than an agreement on terms and trade standards âfor the 21st centuryâ.
Asia, the new hub of regionalism
It is hard not to perceive American strategic preoccupations in this project, which marks a strong comeback for the US in this region (Boulanger et al., 2008; Chachavalpongpun, 2011; Barfield, 2012; Manyin, 2012; Dagenais, 2014; Lewis, 2011). With the end of the Cold War, the United States sought, as it did with Europe, to enhance and broaden its strategic relationships in the region through economic partnerships.
The establishment of the APEC (Asia-Pacific Economic Cooperation) forum in 1993, and the project â approved in Bogor in 1994 â of turning this into a free trade zone by 2020, appear to converge with this goal. US support for Chinaâs entrance into the World Trade Organization (WTO) did so as well. Despite a promising start, APEC never really succeeded in anchoring itself in the region, nor in playing a structuring role there. Other regional initiatives (such as those led by Japan in the 1960s, or by Malaysia in the early 1990s) also petered out. While economically integrated, the region remains highly divided politically and culturally (Beeson & Stone, 2014). As a result, economic diplomacy appears the most reliable platform of cooperation for reconciling the regionâs diverse interests and sensibilities. The Association of Southeast Asian Nations (ASEAN) paved the way in this direction; to this day, it is the only significant economic organization in the region, and the focal point for all regional initiatives (Caballero-Anthony, 2014; Kawai and Wignaraja, 2011; Dent, 2008; Sally, 2006).
The Asian financial crisis of 1997 is another factor that has to be taken into account. At that time, East Asia, with China in the lead, was already the most dynamic region in the world, steadily increasing its market share in the world economy and attracting increasing numbers of investors and capital. It owed this vitality to its outward-focused developmentalist policies, but also to the complex, competitive networks being forged between countries â notably due to progress in transport and communication. These developments allowed the region to form worldwide chains of production and supply, turning it into a new global workshop in a short time.
Beginning in Thailand in July 1997, and spreading throughout Asia, a financial crisis, in a context of great interdependence, exposed the isolation of its countries and the tragic absence of regional institutions. This led to intense diplomatic activity in the monetary, financial and commercial spheres as well as in technology, science and education. Trade agreements have proliferated since then, so that Asia â East Asia in particular â has been described as the main hub for a third wave of regionalism since the Second World War (Deblock, 2012).
These highly varied agreements are mostly bilateral, geared towards the facilitation of trade, and tailored to suit specific interests of the parties involved. At the same time, three points should be noted: (1) the increasing number of plurilateral agreements bears witness to an apparent desire for coherence; (2) agreements, generally referred to as âeconomic partnershipsâ, include mechanisms of economic cooperation as well as trade liberalization; and (3) the content and obligations of these agreements are increasingly in line with North American Free Trade Agreement (NAFTA)-style free trade arrangements.
That said, these agreements âtend to emphasize regulatory cooperation compared to the Anglo-Pacific preference for regulatory rightsâ (Dent 2013, 974). This major difference at least partly explains why the US, impatient to spread its own inflexible model, has been unable to convince its APEC partners to formally open negotiations for a free trade agreement, to match its success in the Americas.
Also, beginning in the 2000s, the US changed its trade strategy, preferring the path of âcompetitive liberalizationâ to its previous approach of organization into regional blocks (Deblock, 2010; Bergsten, 2001). However, caught up as it was in the war against terrorism, it tended to neglect East Asia, leaving the field open for its adversaries in that region â which, while certainly won over by competitive liberalization, were also eager to build their own regional institutions, if possible without the United States.
The United States, an Asia-Pacific nation
Turning now to the other side of the Pacific, three observations can be made from the events of the new century: first, the Partnership for Development and Prosperity came to a halt after the failure of the Summit of Mar del Plata in 2005. This was a large-scale initiative, launched in Miami in 1994, and once compared to the Good Neighbor policy of President Roosevelt, and to the Alliance for Progress of President Kennedy (Feinberg, 1997). At the Mar del Plata Summit, however, the US was confronted with Brazilâs reluctance to follow its lead, and with a constellation of left-wing governments hostile to the integration model of the FTAA (Free Trade Area of the Americas) negotiations. However, no competing project â think, for example, of Mercosur and ALBA (the Bolivarian Alliance for the Peoples of Our America) â has succeeded in establishing itself as a viable alternative, nor led to integration comparable to NAFTA. The US, for its part, concluded numerous free trade agreements (FTA) and other cooperation agreements in the 2000s, and as a result the Americas are now more divided than ever. But, more importantly, the focus of interest in the Western Hemisphere has shifted to China and East Asia, where the worldâs markets will be found from now on.
This is the second observation: phenomenal growth in that region has generated enormous needs, notably for natural resources and basic commodities. This rising demand has attracted the interest of many businesses and investors, leading to an economic boom in many countries. In fact, the US and its corporations have tended to neglect the Americas as a result of Asiaâs new attraction.
While the expansion of China has certainly been a game-changer, an even bigger change has been triggered by the unexpected development of information and communication technologies (ICTs) and by a decline in the cost of maritime transport. These factors, along with the favourable economic environment, led to a new production model that requires less investment but more trade discipline. More competitive and better integrated, Asia has rapidly overtaken the Americas, which remain poorly integrated (except in the North) and still largely dependent on natural resources in the South.
Where are we now? Beyond the recession in world trade that it triggered, the crisis of 2008 reshuffled the deck. More than ever, countries have become aware of the importance of East Asia, both for growth and trade (Athukorala, 2010; Kawai et al., 2010; Dervis et al., 2011; Shiraishi and Okamoto, 2012). A time for great regional initiatives has come; and RCEP is the latest illustration of this phenomenon. At the same time, while Chinese economic growth may have slowed down, it has also changed its profile. Imports have certainly dwindled, but the qualitative upgrading and development of its interior market have caused Chinaâs external needs to diminish (including its need for resources), to the detriment of Latin American economies.
The US too was shaken by the crisis. After dithering on the issue for some time, President Obama made trade his priority. In January 2010, he launched a program aiming to double exports in five years. In October 2011, he succeeded in getting agreements with Colombia, Korea and Panama approved by Congress. Simultaneously Obama launched two mega-negotiations, one directed toward Asia and the other toward Europe. At the risk of offending his European partners, Obama also made the Asia-Pacific his priority â as indicated in his speech in Tokyo on 14 November 2009, in which he presents himself âas Americaâs first Pacific Presidentâ. Hillary Clintonâs article, published 11 October 2011 in Foreign Policy, underlined this point, discussing the US turn toward the Pacific and its entry into the East Asia Summit (Manyin, 2012).
Finally, the Obama administration has shown greater firmness toward China. Acknowledging the Middle Kingdomâs rise in power, the US has cultivated its own alliances, and reaffirmed American presence in Asia. At the same time, as a spearhead of its liberal internationalism, the American liberalization policy has also shown its limits. Despite reforms, the Chinese economy is still far from meeting the competitive criteria of a market economy, Chinese authorities remain impervious to trade disputes and financial or computer-related litigations, and democratic openness has yet to be seen. While liberal internationalism is still the official line in Washington, its promotion is no longer limited to the traditional pathways of bilateralism and multilateralism, but has now extended to plurilateralism and cross-regional partnerships, as illustrated by TPP, TiSA and ACTA, among other negotiations.
A heterogeneous partnership
The TPP is a sizeable but heterogeneous economic group. To speak of âregionalismâ no longer makes sense, as that term refers to integration within a geographic cluster of nations. In t...
