The Trans-Pacific Partnership (TPP) agreement was reached by trade ministers today (The New York Times 10/5/2015), and various organizations have been analyzing the text of the agreement. While the bulk of the agreement removes existing tariff for participating countries, there are some unique elements to the agreement, including standards agreement (Environmental, Labor, and Intellectual Property) and rules and practices in regards to internet regulations (i.e data flow).

The key component for President Obama to convince Congress, not including whether certain components of the agreement hurt certain critical (politically) American industries, is to demonstrate that the agreement will curtail China’s “influence” in various regions. Whether President Obama is able to convince Congress will depend on the amount of political capital he has and is willing to spend.

In the TPP discussion, there is a cause for concern on the vague notion that the agreement is somehow a reaction to China’s growing influence in various regions around the world, including Southeast Asia. While the agreement sets certain standards beyond a mere trade agreement, there does not seem to be any significant element or mechanism prima facie that would counter China’s “influence”.

It can be argued that China can use its vast amount of foreign capital (US Dollars) to continue exerting political and economic influence in various parts of the region. There is nothing in the TPP that would counter China’s growing influence based on China’s capital investments abroad.

Supporters of the TPP would argue that, without China’s participation of the TPP, China’s influence among the participating countries would deteriorate based on trade bloc exclusion. Nevertheless, China can simply exert political and economic (via foreign investments) influence by spending its vast foreign reserves to other nations. There is nothing in the TPP (so far reported) that would prevent a non-TPP member from continuing foreign direct investments in TPP member states.

Interestingly, TPP seems to be a potential welcoming framework among some Chinese academics (The New York Times 4/28/2015), so the notion that TPP has a negative effect on China is even more questionable.

It would be politically interesting to see President Obama attempting to pass the TPP if China suddenly expresses greater interest to join the trade union. Such a scenario demonstrates that the mechanisms designed to counter China’s influence might not even come to fruition due to China’s willingness to endorse such idea.

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