Belt & Road meets 'gold standard,' not TPP

By Tom McGregor
0 Comment(s)Print E-mail China.org.cn, September 29, 2016
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During the 1st 2016 U.S. presidential debate between Hillary Clinton and Donald Trump, the topic of the Trans-Pacific Partnership (TPP) negotiations was raised. Clinton formerly supported the deal when she served as U.S. Secretary of State, but now she's against it.

"Clinton has called the TPP, the 'gold standard.' She loved it. She promoted it. And up until recently she was a strong advocate for it with her boss, Barack Obama," Trump said.

The U.S. State Department issued a press release on November 15, 2012, of Clinton's speech transcripts when she visited Adelaide, Australia. "This TPP sets the 'gold standard' in trade agreements to open free, transparent, fair trade," she said.

She added, "Now, that's what I call 'jobs diplomacy' and that's what I've been focused on in part as Secretary of State."

Still no delivery on 'jobs diplomacy'

The TPP has been under negotiations since the start of U.S. President Obama's administration in 2008. If signed and approved by the U.S. Congress, the agreement would cover over 40 percent of the world's total trade.

Other signatories of TPP include Japan, Canada, Mexico, Australia, South Korea, New Zealand, most member states of ASEAN (Association of Southeast Asian Nations) and other emerging markets in Asia, although the deal-makers did not invite China.

Clinton touted TPP as jobs diplomacy, but Trump said the deal would not benefit the U.S. manufacturing sector.

"The TPP is almost as bad as NAFTA (North American Free Trade Agreement)," Trump said. "TPP could destroy the American middle class. U.S. businesses are given incentives to move jobs to Asian countries for lower wages."

Clinton's job diplomacy only guarantees expansion of employment for sweatshop workers in Asia. Such practices lower wages for American workers at home.

TPP could spark small business bankruptcies

If TPP becomes reality, the greatest tragedy would be the death of small businesses. Clinton, as Secretary of State, called for TPP to be governed by the so-called "rule of law." But it's Washington, not Beijing, Tokyo or Singapore, that would set global governance standards.

The TPP is a tool for Big Business to impose tougher regulations on all nations signed on, which would be costly and mean that only major corporations could abide by them, which would drive small and medium-sized enterprises out of business.

"If we do this right, and that's what we're trying to do, then globalization, which is inevitable, can become a race to the top, with rising standards …" Clinton said.

TPP may not be a winner for all countries involved, but in 2013 Chinese President Xi Jinping introduced the "Silk Road Economic Belt" and "21st Century Maritime Silk Road," commonly known as Belt and Road (B&R) initiative, which brings together Asia, Europe and Africa via overland and maritime networks.

B&R shows proven, positive results

The B&R can boost cross-border trade and investment with the emerging markets by building economic zones, along with manufacturing, energy and transportation hubs, including roads, railways and airports.

The Asian Infrastructure Investment Bank (AIIB) serves as the finance mechanism for the B&R. The benefits are already coming into fruition.

"Trade between China and B&R countries exceeded US$600 billion, 26 percent of China's total trade volume during the first eight months of 2016," Fang Aiqin, deputy head of China's Ministry of Commerce, told ECNS (English-language China News Service).

From January-August this year, China invested nearly US$10 billion in B&R countries via AIIB and Silk Road Fund.

Fang added, "Chinese companies established 50 overseas economic and trade cooperation zones in the B&R region at a total investment of US$15.6 billion, creating US$900 million in tax revenues and over 70,000 jobs in host countries."

Win-win benefits for our world

Outside Asia, few people are familiar with the Belt and Road initiative, while nearly everyone has heard of TPP. The TPP does not offer to build roads and bridges, but the B&R has already done so.

The main challenge TPP faces is that Washington controls the levers of power on the trade deal. Countries that sign on to the agreement must agree to Washington's rules or suffer the consequences.

On the other hand, the B&R allows for greater economic freedom. If a country agrees to work with Beijing, they can use the facilities when completed. Accordingly, B&R creates the "gold standard" on win-win and mutual benefits for all players involved.

Tom McGregor, an Asia-Pacific columnist based in Beijing.

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