The Association of Southeast Asian Nations (ASEAN) announced
at its meeting in November 2012 that it would host negotiations among its
members on “a sweeping trade pact that,” according to the New York Times,
“would include China.” The trade agreement would include not only the ten
countries that are in the association, but also six other countries that have
free-trade agreements with the association. In addition to China, those
countries include Australia, India, Japan, New Zealand and South Korea. Half of
the world’s population would be included in the pact. Notably absent is the
United States. This is no accident, as the Obama administration’s own proposal
for an eleven-nation Trans-Pacific Partnership excludes China. In other words,
the contending proposals may be more about a “control battle” between two
contending empires—the United States and China—than anything else. Moreover,
which proposal succeeds could say something about whether China succeeds the
United States as the hegemonic super-power of the twenty-first century.
That the immediate issue was that of China’s inclusion or
exclusion can be gleamed from Barak Obama’s statement during one of the
presidential debates in 2012. “We’re organizing trade relations with countries
other than China so that China starts feeling more pressure about meeting basic
international standards.” The inclusion of basic
can be read as a slight against China. However, that protecting state-run
enterprises as done by China would continue to be allowed under ASEAN’s Regional
Comprehensive Economic Partnership suggests that what the U.S. takes to be
settled in terms of what constitutes the basics of international trade may not
have been so settled after all. China could point to U.S. companies being able
to deduct expenses on their income tax forms as a form of government aid to the
home team. Since at least the mercantilist era in the seventeenth century,
governments have carried out industrial policies designed to profit domestic
companies and increase tax revenue. Laissez-faire-based trade may not be
realistic, considering the myriad ways in which governments interact with
business. Regulation itself, in being of a strategic to some firms more than
others, could have a differential impact on domestic and foreign firms. It is
unrealistic to assume that governments would stop regulating just so the trade
is “fair” as well as “free.”
As the twenty-first century was coming into its own, two
major economic powers in the world were contending not only for economic
dominance, but political hegemony as well. Would it be another American
century, or would power follow economic growth over to Asia? The “control
battle” itself ostensibly about ordering trade alliances could be an indication
that power was about to shift on a massive scale in terms of which economic power would become the definitive superpower.
Source:
Jane Perlez, “Asian
Nations Plan Trade Bloc That, Unlike U.S.’s, Invites China,” The New York Times, November 21, 2012.
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