In this podcast, Paul Haenle and former U.S. Trade Representative Tim Stratford discussed the economic and geopolitical nature of the two massive Asia-Pacific trade agreements currently under negotiation: the Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP). The two agreements differ in their ambitions, Stratford explained. The RCEP’s aims are more modest, focusing on tariff cuts and flexibility, while the TPP is a high-standards agreement aimed at establishing WTO-plus trade standards for the region. But Stratford said both pacts aim to advance trade liberalization and economic integration between Asia-Pacific countries and that their visions can be complementary rather than conflicting. Furthermore, trade agreements like the TPP can help bring the benefit of economic relations to individual households and companies by aiding job creation and expanding interaction at the people-to-people level to grow understanding and alleviate mistrust.

Because the United States is a member of the TPP and China is a member of the RCEP, many have assumed the two efforts are competing or incompatible. Contrary to initial suspicions that the TPP was part of the U.S. “rebalancing” policy or a U.S.-led initiative aimed at containing China, Stratford explained that the United States joined TPP talks that were already underway among Brunei, New Zealand, Singapore, and Australia at the end of the Bush administration.

Stratford said that by forging ahead, early members of the TPP could demonstrate the benefits of a next generation trade agreement and spur confidence in others, including China, to join when ready. The RCEP could serve as a stepping-stone for less-developed countries not yet ready to commit to the TPP’s high standards. There has been growing recognition in Beijing that the TPP could be beneficial to China, and Stratford said that in the long term, a single trade and investment system with WTO-plus standards for the Asia-Pacific is a constructive and important goal.

Tim Stratford

Tim Stratford is the managing partner of the Beijing office of Covington & Burling LLP, where he focuses on advising international clients doing business in China and assisting Chinese companies seeking to expand their businesses globally. Stratford was previously the assistant U.S. trade representative responsible for developing and implementing U.S. trade policy toward Mainland China, Taiwan, Hong Kong, Macao, and Mongolia. Prior to his work at the office of the United States Trade Representative, Stratford worked in China for more than 25 years, including serving as General Counsel for General Motors’ China operations, as Minister-Counselor for Commercial Affairs at the U.S. Embassy in Beijing, and as Chairman of the American Chamber of Commerce China.

Paul Haenle

Paul Haenle is the director of the Carnegie–Tsinghua Center. Prior to joining Carnegie, he served from June 2007 to June 2009 as the director for China, Taiwan, and Mongolian Affairs on the National Security Council staffs of former president George W. Bush and President Barack Obama.