China is working towards creating one the largest trading block in history spanning from India to Japan, a top US trade official has said.
US Trade Representative (USTR) Mike Froman said that not signing Trans Pacific Partnership (TPP) would be akin to conceding the Asia Pacific space to China.
"China is executing on its regional strategy: the One Belt, One Road initiative, the Silk Road Fund, the Asian Infrastructure Investment Bank, the challenges in the East and South China Seas, and its push to conclude the regional comprehensive economic partnership, or RCEP," Froman said yesterday in his address at the Rice University's Baker Institute for Public Policy in Dallas Texas.
"RCEP is a mega-regional trade agreement with 16 countries, spanning from India to Japan. It would be the largest regional trading block in history. Russia too has an active regional strategy, signing partnership agreement with countries in the region and through its Eurasian economic union," Froman said.
Observing that China is posing a major challenge to the US, Froman said that answer to this challenge was to put TPP in place as soon as possible.
"China is not our adversary. But it is a competitor that in many respects holds very different views of its role and responsibilities than other major powers," he said.
"There is a perception that China doesn't play by the same rules that we and much of the rest of the world do, that it's taking advantage of us, and that it's asserting its interests in the Asia-Pacific region, and more generally, at the expense of ours and at the expense of its neighbours," he added.
What is interesting about this debate is that while the diagnosis might be right, many have come to exactly the wrong prescription. The answer to this challenge is not to allow China to write the rules of the road for trade, but for the United States to lead that effort, he said.
"The answer is not to allow China to carve up the markets of the future, but to level the playing field and give American workers and businesses a shot to compete and win. The answer to China's challenge is not to withdraw from TPP, but to put it in place as soon as possible," Froman said.
He said that at a time when political discourse in the US was increasingly turning inward, it is worth recalling what's at stake in the Asia-Pacific.
The US is a Pacific power with a long history of leadership and deep interests in the region, he asserted.
Forman warned that for the US turning inward meant turning away from this century's greatest economic opportunity.
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