China Is Absent From Trans-Pacific Trade Deal

Transcript

RENEE MONTAGNE, HOST:

After years of negotiating, 12 nations yesterday reached a final agreement on the Trans-Pacific Partnership, or TPP, which would be the largest free-trade deal in the world - but one Pacific nation notably absent, China. Here's NPR's Jackie Northam.

JACKIE NORTHAM, BYLINE: When the U.S. first joined the TPP back in 2008, China was a skeptical. Matthew Goodman, with the Center for Strategic and International Studies, says Beijing thought the U.S. was just playing around with a few other smaller Asia-Pacific nations.

MATTHEW GOODMAN: Then there was a period, as the negotiations got going and started to expand the membership, that China began to feel this was some sort of strategy by the U.S. to exclude China or even contain China.

NORTHAM: Marc Mealy, vice president of the U.S.-ASEAN Business Council, says the TPP could be seen as setting up a counterbalance to China's growing influence in the region. He says in reality, though, the ambitious free-trade agreement is an important component of the Obama administration's so-called pivot to Asia.

MARC MEALY: It actually complements, in an economic way, other elements of sort of the U.S. government's rebalancing approach. You know, there's a security dimension. There's a foreign assistance dimension. And TPP kind of becomes that trade dimension.

NORTHAM: Mealy says the TPP is expected to deepen U.S. engagement with the Asia region.

MEALY: It can help create a sentiment that U.S. engagement, in an economic sense, is just as focused, just as long-term in perspective as China's economic engagement with many of the economies in Asia.

NORTHAM: Goodman says China is at the center of regional economic affairs in Asia and is critical to international supply chains. It also has bilateral trade relations with many of its neighbors and is working on multilateral trade deals with other economic powerhouses, like India. But Goodman says the TPP could have a favorable impact on how China does business.

GOODMAN: I think it's going to be a bit of a wake-up call for Beijing. I think now they're going to have to look at how they interact with the members of TPP but, you know, more broadly in the region. And I think that that's going to perhaps give, in a positive way, a spur to economic reform within China so that they can get themselves ready to join this kind of regional agreement.

NORTHAM: China has not applied to the TPP yet. Jackie Northam, NPR News, Washington. Transcript provided by NPR, Copyright NPR.