Beijing, Washington locked in FTA race

There appears to be a race between the United States and China to dominate the rules-setting game for trade by being the first to be able to announce plans of realizing a Free Trade Agreement for the Asia-Pacific. If the Trans-Pacific Partnership can be concluded, in one form or the other, so an announcement can be made at the APEC meeting in Beijing at the end of the week it would steal the thunder from China. But if such an announcement is not forthcoming, China will likely announce a "Beijing Road Map" for an FTA of the Pacific-rim, building on APEC rather than the TPP. Billions of dollars in trade are at stake.

It will be difficult for leaders from the TPP countries to ignore a declaration endorsing a feasibility study for the FTAAP if they cannot offer an alternative. Reports on whether the US has been able to dissuade China from floating the proposal have been mixed. They have succeeded in leaving the door slightly ajar for the TPP to play a future role by blocking reference to a deadline for completion of 2025. Although deadlines can be missed, as the TPP itself demonstrates, setting one implies it is more than just a vision but a plan bounded by a timeframe. The fear is that pursuing the FTAAP could derail the TPP.

There is widespread confusion about why the TPP is taking so long, and what it may look like when finally concluded.