24.07.2017 Author: Vladimir Terehov

Momentous Maneuvers around Integration Projects

762234234The fundamental reformatting of the global political map that has recently begun has been prompted by the refusal of the US to participate in two fundamental projects that the former American administration viewed as potentially being the basis of the vision for the future world order. More precisely, the political forces to which it was the spokesman of interests.

This refers to the “partnerships”, namely the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP), both of which are purposefully being advanced by part of the American establishment that can be provisionally described as the “neocon-globalist” group.

Unlike the second project, the first one reached the home stretch and the case was only for ratification by all 12 members of the already signed TPP, that is, the procedure seemed to be purely formal.

However, at the end of 2016, representatives of a competing political current, which (also provisionally) could be described as the “neo-isolationist” group, ascended to the helm of the world’s leading power.

The key message propounded by representatives of this group to the global political areana was roughly as follows: “We don’t need the world’s problems. Our hands are quite full with our own.” This message was met by their numerous allies and friends (obviously also members of TPP and TTIP) with a reaction that can only be accurately described as an outcry of horror, “What about us?”

China, the new contender for world leadership, is closely and with an eastern equanimity following the the turmoil that has risen in the “Western” camp (again, provisional), with a message that looks something like this: “Don’t worry. We have an idea: we join forces and build a global transport infrastructure and, on a global scale, get rid of trade barriers. All interested parties are invited to participate.”

However, it is apparent that the viability of this idea depends fundamentally on its recognition by new players occupying previously-occupied privileged positions at the global gaming table. The newbies could as well be Japan, the EU (Germany) and India. And, if the attitude of the first two to the Chinese proposal is a mixture of interest and apprehension, India has rejected it from the threshold because of the growing tension in the political sphere with the People’s Republic of China.

In the last 10-20 years, there have also been mutual fears (going back centuries) in Japanese-Chinese relations. However, in the face of uncertainty in the American foreign policy, Japan has shown interest in re-establishing political ties with Beijing, which is responding to this quite positively.

There is a sensing of positions on the one hand by Japan to join the Chinese initiative to revive the “Great Silk Road” and, on the other, to connect China to the TPP without the United States. Attempts to combine both projects cannot be excluded. However, Japan prefers to first rescue the TPP, and secondly, to develop relations with the EU.

We earlier mentioned the Hanoi Summit held on May 21 on the initiative of Tokyo with the leaders of the 11- and (i.e. without the US) members of the TPP. It seemed then that the event was nothing more than an element of Japan’s political manoeuvring in the face of continuing uncertainty in the course of the American foreign policy.

Nevertheless, a month and a half later, a meeting of responsible representatives of the 11 TPP members was held in Japan, at which the head of the Japanese delegation K. Umemoto expressed confidence in the successful completion of the TPP. As in the past, for this, the site of the next APEC forum, which will be held in November this year in Vietnam, will be used.

However, there is a problem with the procedural plan that needs to be addressed in the remaining three months. According to the earlier procedure, the TPP shall enter into force when it is ratified by at least half of the member countries, which account for at least 85 per cent of the total GDP of all participating countries.

Although Japan, the current main “promoter” of the TPP, has already ratified it, in the eyes of some other participants (e.g. Malaysia and Viet Nam), with the departure of the United States, the attractiveness of the project has been significantly reduced. This is because this attractiveness is in no small way depended on the prospect of gaining duty-free access to the giant American market. According to the statement of K. Umemoto, in the remaining months, a new procedure for introducing the TPP into operation will have to be developed and adopted.

However, Japan does not lose hope and the possibility of returning the “Prodigal Pope” (that is, the United States) to the family nucleus it created around the TPP. In any case, the funeral of the TPP turned out to be premature.

A very important development was the successful conclusion in early July this year of the long negotiations between Japan and the EU with a view to signing an agreement on the progressive establishment of a bilateral free trade area. This was a major foreign policy success story of the government of Shinzo Abe, which is under increasing pressure back home. It is particularly noteworthy that the parties to the agreement today account for about 30 per cent of world GDP.

Against this backdrop, the continued slippage (also very long) of the negotiation process in the People’s Republic of China-EU format for the conclusion of a similar agreement seems no less remarkable. The possible reasons for the difficulties in establishing a Sino-European FTA were discussed earlier in the NEO.

Nevertheless, the negotiations are continuing and prospects for the formation of an ambitious tripartite FTA in the China-EU-Japan format, with the involvement of the members of the TPP, cannot be ruled out. This format may be an option for implementing the Silk Road project.

Meanwhile, China is attempting to engage in its Silk Road project even members of the North American NAFTA Association (which includes the United States, Canada and Mexico), which has been operating for over 20 years. The fact is that President Donald Trump views NAFTA, which was also created mainly by the US, no less negatively (than the TPP).

In this regard, the visit to China of the Governor General of Canada David Johnston, during which he held talks with the Chinese leader Xi Jinping and Prime Minister Li Keqiang on July 13, attracted attention. The parties agreed to further develop relations, especially in the economic sphere.

Commenting on the restrictive measures recently adopted by the United States with regard to the export of certain products from Canada and Mexico, the Chinese Global Times notes the new opportunities that this has created for Beijing in its relations with both of these NAFTA member countries.

However, the fate of all recent integration projects will be decisively determined by the nature of the development of political relations in the “China-EU-Japan” triangle described above, as well as by the transformation of the course of the US foreign policy. In the meantime, the situation of political schizophrenia and the mere paranoia into which the state administration of the current world leader has been plunged do not yet allow us to say anything definite about its behavior on the world arena, even in the short term.

In the meantime, new cards are being put on the global political game table, and the very fact of throwing in does not tune in a positive way. This concerns recent events such as:

– the new stage of escalation on the Sino-Indian border

– the next round (but unprecedented) of the Malabar Naval Exercise in the Bay of Bengal, with the participation of the United States Navy, India and Japan;

– a flyby on July 14 of a group of Chinese bombers in (neutral) airspace over the Strait of Miyako of the Japanese archipelago of Ryukyu. Previous similar acts over this strait were previously discussed in the NEO;

– expansion of the geography of confrontation between Japanese and Chinese coast guard ships. If these had so far been confined to the area around the Senkaku/Diaoyu islands, on July 16, something similar happened along the Tsushima Strait.

Therefore, we must once again note the continuing competition in the global game of two competing trends: the pursuit of multilateral and mutually beneficial economic cooperation and the continuing mutual apprehensions that engender activity in the military and political spheres.

And still it remains unclear, “who will win?”