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WHEN Singapore， New Zealand and Chile announced the launch of the Pacific Three Closer Economic Partnership （P3-CEP） negotiations during the APEC Economic Leaders’Meeting in Mexico 12 years ago， they could not have anticipated their initiative would one day spiral into a geopolitical competition.
The initial aim of the negotiation was to explore a voluntary free trade project under the APEC framework.
In 1994， the APEC leaders’ meeting in Indonesia set goals to achieve a free and open trade and investment system - by 2010 for industrialized member economies and by 2020 for developing economies. In 1997， the Vancouver leaders’ meeting in Canada endorsed a proposal for Early Voluntary Sectoral Liberalization in 15 sectors. However， due to the Asian financial crisis in 1997-98 and the international financial crisis in 2008-09， a new wave of protectionism slowed trade liberalization among APEC members.
The WTO-sponsored Doha Round of multilateral trade negotiations also reached an impasse. Against this backdrop， some small and middle-sized economies decided to commit to smaller-scale multilateral trade liberalization practices. Regional and subregional， bilateral and multilateral free trade negotiations sprang up.
With the addition of Brunei in 2005， P3-CEP developed into the Trans-Pacific Strategic Economic Partnership Agreement （TPSEP）.
Washington’s wishes In 2008， the United States showed interest in joining TPSEP negotiations and gradually promoted it into a proposed Trans-Pacific Partnership （TPP）. In 2009， the Barack Obama administration officially announced participation in TPP talks. So far， 12 countries have joined the negotiations.
The United States has used its influence to dominate the scene and pressure all participants to reach a framework agreement by the end of this year. Its enthusiasm is driven by both trade and strategic concerns. In addition to traditional trade and investment liberalization issues， the TPP will also involve regulation of financial services， government procurement， intellectual property protection， state-owned enterprises， market access， environment， labor issues， and so on. It will facilitate the expansion of U.S. exports and set new standards for global trade.
Besides， it will be an important part of the Obama administration’s “Pivot to Asia”strategy， attempting to shift the direction of the booming East Asian economic integration by luring regional economies into the U.S.-led Asia-Pacific regional institutional construction. By excluding China from the TPP， the United States intends to dilute China’s increasing influence in the region. Ultimately， Washington wishes to reshape the global trade pattern. While pushing hard for TPP negotiations， it has also sped up negotiations with the EU on the Transatlantic Trade and Investment Partnership， seeking a U.S.-EU free trade zone. The United States also leads the global Trade in Services Agreement negotiations. If its plans fructify， global trade will undergo a major transformation.
The TPP has marked a change from the traditional negotiation mode of mutually exchanging market access， attempting to set new rules for regional economic integration. However， most Asia-Pacific economies are unwilling to put all their eggs into one basket. While welcoming TPP negotiations， they also actively participate in bilateral trade negotiations and multilateral talks within frameworks such as the Association of Southeast Asian Nations （ASEAN）， the East Asia Summit， ASEAN+1 and ASEAN+3.
Regional solutions In 2006， Japan proposed the Comprehensive Economic Partnership in East Asia on the basis of East Asian cooperation， attempting to compete with China’s proposal of an East Asia Free Trade Area on the basis of the ASEAN+3 group （ASEAN plus China， Japan and South Korea）. Both initiatives are aimed at establishing an East Asian community. When TPP negotiations gained momentum， some East Asian economies including Japan， Singapore， Malaysia， Viet Nam and the Philippines joined the talks. To maintain its lead role in East Asian cooperation， ASEAN as a whole began to promote negotiations for the Regional Comprehensive Economic Partnership （RCEP）.
The RCEP is a proposed free trade agreement （FTA） between the 10 ASEAN members and six economies with which ASEAN has existing FTAs - China， Japan， South Korea， India， Australia and New Zealand. It aims to create a high-quality， modern FTA that will add new elements including trade in services， intellectual property protection and competition policies on the basis of existing FTAs. While member economies hold talks on the RCEP， bilateral free trade negotiations are underway between ASEAN and its partners， as well as talks on a China-South Korea FTA and a China-Japan-South Korea FTA.
Although TPP and RCEP members mostly overlap， the United States and China - the world’s two largest economies - have participated in only one of the two platforms respectively. Therefore the two platforms will unavoidably compete for dominance in regional trade liberalization efforts. While the RCEP threshold is relatively low and market openness among member states high， some regional economies might focus more on TPP negotiations owing to their own strategic considerations as well as current strained relations with China. The Asia-Pacific region has been dubbed the world’s “Rim of Hope.” The focus of global economic development and strategic security is shifting rapidly to the east. However， due to differences in culture， social systems and economic development within the region， both the TPP and RCEP face difficulties. Perhaps neither can become the sole platform for Asia-Pacific regional trade liberalization but there is possibility for the integration of both. China hopes the RCEP agreement can be reached by the end of 2015 but is also open to the TPP， believing the two are not mutually exclusive. The Obama administration has also publicly expressed that China is welcome to join the TPP.
The upcoming APEC leaders’ meeting could play an active role in promoting the integration of the TPP and RCEP by promoting the Free Trade Agreement of the Asia-Pacific （FTAAP）. APEC first proposed the FTAAP in 2004. China has chosen “Jointly Build a Future-Oriented Asia-Pacific Partnership” as the theme of this year’s meeting. It is hoped the meet would launch a feasibility study of the FTAAP and create substantial progress in regional economic integration.
Perhaps in the future， when people review the process of trade and investment liberalization in the Asia-Pacific， they will see that the TPP and RCEP were the two wheels of the FTAAP that the APEC drove in the late autumn of 2014 in Beijing.
The initial aim of the negotiation was to explore a voluntary free trade project under the APEC framework.
In 1994， the APEC leaders’ meeting in Indonesia set goals to achieve a free and open trade and investment system - by 2010 for industrialized member economies and by 2020 for developing economies. In 1997， the Vancouver leaders’ meeting in Canada endorsed a proposal for Early Voluntary Sectoral Liberalization in 15 sectors. However， due to the Asian financial crisis in 1997-98 and the international financial crisis in 2008-09， a new wave of protectionism slowed trade liberalization among APEC members.
The WTO-sponsored Doha Round of multilateral trade negotiations also reached an impasse. Against this backdrop， some small and middle-sized economies decided to commit to smaller-scale multilateral trade liberalization practices. Regional and subregional， bilateral and multilateral free trade negotiations sprang up.
With the addition of Brunei in 2005， P3-CEP developed into the Trans-Pacific Strategic Economic Partnership Agreement （TPSEP）.
Washington’s wishes In 2008， the United States showed interest in joining TPSEP negotiations and gradually promoted it into a proposed Trans-Pacific Partnership （TPP）. In 2009， the Barack Obama administration officially announced participation in TPP talks. So far， 12 countries have joined the negotiations.
The United States has used its influence to dominate the scene and pressure all participants to reach a framework agreement by the end of this year. Its enthusiasm is driven by both trade and strategic concerns. In addition to traditional trade and investment liberalization issues， the TPP will also involve regulation of financial services， government procurement， intellectual property protection， state-owned enterprises， market access， environment， labor issues， and so on. It will facilitate the expansion of U.S. exports and set new standards for global trade.
Besides， it will be an important part of the Obama administration’s “Pivot to Asia”strategy， attempting to shift the direction of the booming East Asian economic integration by luring regional economies into the U.S.-led Asia-Pacific regional institutional construction. By excluding China from the TPP， the United States intends to dilute China’s increasing influence in the region. Ultimately， Washington wishes to reshape the global trade pattern. While pushing hard for TPP negotiations， it has also sped up negotiations with the EU on the Transatlantic Trade and Investment Partnership， seeking a U.S.-EU free trade zone. The United States also leads the global Trade in Services Agreement negotiations. If its plans fructify， global trade will undergo a major transformation.
The TPP has marked a change from the traditional negotiation mode of mutually exchanging market access， attempting to set new rules for regional economic integration. However， most Asia-Pacific economies are unwilling to put all their eggs into one basket. While welcoming TPP negotiations， they also actively participate in bilateral trade negotiations and multilateral talks within frameworks such as the Association of Southeast Asian Nations （ASEAN）， the East Asia Summit， ASEAN+1 and ASEAN+3.
Regional solutions In 2006， Japan proposed the Comprehensive Economic Partnership in East Asia on the basis of East Asian cooperation， attempting to compete with China’s proposal of an East Asia Free Trade Area on the basis of the ASEAN+3 group （ASEAN plus China， Japan and South Korea）. Both initiatives are aimed at establishing an East Asian community. When TPP negotiations gained momentum， some East Asian economies including Japan， Singapore， Malaysia， Viet Nam and the Philippines joined the talks. To maintain its lead role in East Asian cooperation， ASEAN as a whole began to promote negotiations for the Regional Comprehensive Economic Partnership （RCEP）.
The RCEP is a proposed free trade agreement （FTA） between the 10 ASEAN members and six economies with which ASEAN has existing FTAs - China， Japan， South Korea， India， Australia and New Zealand. It aims to create a high-quality， modern FTA that will add new elements including trade in services， intellectual property protection and competition policies on the basis of existing FTAs. While member economies hold talks on the RCEP， bilateral free trade negotiations are underway between ASEAN and its partners， as well as talks on a China-South Korea FTA and a China-Japan-South Korea FTA.
Although TPP and RCEP members mostly overlap， the United States and China - the world’s two largest economies - have participated in only one of the two platforms respectively. Therefore the two platforms will unavoidably compete for dominance in regional trade liberalization efforts. While the RCEP threshold is relatively low and market openness among member states high， some regional economies might focus more on TPP negotiations owing to their own strategic considerations as well as current strained relations with China. The Asia-Pacific region has been dubbed the world’s “Rim of Hope.” The focus of global economic development and strategic security is shifting rapidly to the east. However， due to differences in culture， social systems and economic development within the region， both the TPP and RCEP face difficulties. Perhaps neither can become the sole platform for Asia-Pacific regional trade liberalization but there is possibility for the integration of both. China hopes the RCEP agreement can be reached by the end of 2015 but is also open to the TPP， believing the two are not mutually exclusive. The Obama administration has also publicly expressed that China is welcome to join the TPP.
The upcoming APEC leaders’ meeting could play an active role in promoting the integration of the TPP and RCEP by promoting the Free Trade Agreement of the Asia-Pacific （FTAAP）. APEC first proposed the FTAAP in 2004. China has chosen “Jointly Build a Future-Oriented Asia-Pacific Partnership” as the theme of this year’s meeting. It is hoped the meet would launch a feasibility study of the FTAAP and create substantial progress in regional economic integration.
Perhaps in the future， when people review the process of trade and investment liberalization in the Asia-Pacific， they will see that the TPP and RCEP were the two wheels of the FTAAP that the APEC drove in the late autumn of 2014 in Beijing.