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Wednesday, Nov. 30, 2011

TPP: APEC's anti-China son?


The French have a saying: "The more something changes, the more it remains the same thing."

When the forerunner of the APEC (Asia-Pacific Economic Cooperation) grouping first emerged four decades ago, the aim was to create a trade bloc that would exclude China. Now we have the TPP (Trans-Pacific Strategic Economic Partnership Agreement) which also seeks an Asia-Pacific trade bloc with China excluded.

Why the relentless determination to exclude Asia's largest nation? It is as if the Europeans had ganged up to exclude Germany from their economic union.

APEC's anti-China bias goes back 40 years, to its origins as a Pacific Free Trade Area (PAFTA) concept proposed by a rightwing Japanese academic and supported by Australian academics, all keen to have Japan look away from China and toward the Pacific Basin. The United States, Canada, New Zealand and Australia were supposed to come together to offer Japan the markets and trade concessions it needed to become the dominant Asian power.

PAFTA was quite unrealistic, particularly since Japan was determined to keep its own markets closed. It was replaced by a variety of groupings — PAFTAD, PBCC, PBEC — where academics and businessmen could come together privately to continue talking about the PAFTA idea and where China continued to be ignored. (If I know something about these shifts and changes it is because I was present at the creation. I give a fuller account at gregoryclark.net/lifestory/page4/page4.html.)

Eventually Tokyo decided to become involved. Realizing that the other noncommunist nations of East and Southeast Asia should not be ignored, it came up with its own highly forgettable governmental schemes — ASPAC, MEDSEA, etc. But once again China was excluded and Tokyo's schemes also failed to get off the ground, mainly due to Asian anti-Japan suspicions.

But now that governments were involved, it was possible for the original PAFTA concept to be revived and juiced up. This time it would have the noncommunist East and Southeast Asian nations come together with the Anglo-Pacific nations to form APEC, with distant Latin Americans dragged in to provide numbers and justify the original Pacific Basin orientation. China once again was excluded.

But Tokyo still faced the problem of Asian suspicions. So the idea was handed over to then Australian Prime Minister Bob Hawke, to launch and promote.

APEC never got round to creating that trade bloc; for the most part, it has remained as a windy talk-fest operation, providing jobs for an army of bureaucrats and academics to talk about the benefits of free trade. As such, it eventually has had to admit China. But now we have the TPP as a free-trade bloc successor, with Australia once again playing a leading role, and with the anti-China bias even more obvious than before; the aim is to rival Beijing's offer of an FTA with the ASEAN nations.

As such it has been strongly embraced by a U.S. keen to link up with Tokyo to create the dominant Asian economic bloc. True, Tokyo still has to decide whether it can open its markets enough to be a member. But it does seem happy with the anti-Beijing slant.

Australia's role is especially curious. Its economy relies heavily on China. Yet Canberra has yet to see an anti-China trade and military alliance in Asia that it did not like. This constant reluctance to accept China as an important Asian nation is getting ridiculous.

We can understand the U.S. motive; as its Middle East military involvements wind down, its military looks for new ground to cover and new enemies to counter. But elsewhere the anti-China drumbeats seem rather far-fetched. The European Union and the U.S. say they need Chinese money to help rescue their economies. But the same nations still impose trade and other embargos on China for an alleged Tiananmen Square massacre that never happened. (To know what really happened in and around that Square on the night of June 3-4, 1989, read the declassified U.S. Beijing Embassy reports available on the Internet).

True, China's deliberate undervaluation of its exchange rate is one reason the U.S. and EU economies are in trouble. But they can only blame themselves for the foolish adherence to rigid free-trade concepts that prevent their retaliation against manipulated exchange rates. Their equally foolish obedience to austerity policies that guarantee their economic self-strangulation does not help either.

China is accused of human rights violations, usually by people who have condoned human rights abuses elsewhere far greater than anything we see in China today. Tokyo says China's territorial claims in the East China Sea, the Senkaku Islands especially, prove aggressiveness.

But most of the East China Sea, including the Senkaku Islands, happen to lie on China's continental shelf. That plus some historical factors make the problem far more complicated than many in Japan want to realize. Chinese claims in the South China Sea are also supposed to prove aggressiveness. But Taiwan too has claims there, based mainly on history. Is it too supposed to be aggressive?

China's claims are also partly based on history, but another factor has to be persistent U.S. surveillance activities along the Chinese coast — to the south of Hainan Island especially. Yet another could be factional differences between the Chinese military and politicians. And yet another could be the recent toughening in Beijing's border claims, possibly because its past policies of compromise have sometimes rebounded against it.

I was on Canberra's China desk when China was supposed to have attacked India over a 1962 border dispute. We had before us the maps and data proving the exact opposite — that India had attacked China, which then retaliated — and one reason for the Indian attack was a misplaced belief that China's generosity in its border proposals implied weakness.

Western "black information" sources made sure these facts were suppressed. The false belief that China was guilty of unprovoked aggression helped lead to the Vietnam War. It persists even today.

China is a large nation with an intelligent, hardworking and, to date, peacefully minded population, crucial to the future of Asia. It should be taken more seriously.

Gregory Clark , a former Australian diplomat and government official, is a longtime resident of Japan. A Japanese translation of this article will appear on www.gregoryclark.net.


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