The Misguided US Trade Gamble Against China

As Congress decides whether to grant trade promotion authority (TPA), which would formally allow US President Barack Obama to negotiate the Trans-Pacific Partnership (TPP), the surrounding debate reveals much about attitudes toward economic globalization and, in particular, toward China’s rising clout in the international economy. It reflects a broader misconception among many lawmakers, who embrace the outdated notion that economic relations constitute a zero-sum game, according to which excluding China from multilateral trade deals and international institutions is in America’s interest.

In a speech at Nike’s headquarters to promote the TPP, Obama recently claimed that if the US does not write the rules of trade around the world, China will. Yet a strategy toward China that fails to adequately include the country would actually diminish America’s ability to do just that. China’s decision to try and set up its own institutions that run parallel to the established system, such as the recent Asian Infrastructure Investment Bank (AIIB), is a predictable reaction to these perceived injustices. If the United States really wants China to become a ​“responsible stakeholder” in the global economic order, it must engage with China to let it become a serious shareholder as well.

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