Dodwell's blog on SOM2 Qingdao - Post 2

May 21, 2014


Contested pathways to a Free Trade Area of the Asia Pacific
 
When in Ningbo in February China tabled its concept note for a meeting on the margins of Qingdao SOM2 on how the various Asian regional integration initiatives might be used to build towards a Free Trade Area of the Asia Pacific, I had expected a saloon-bar fight to break out immediately. Surely the US would  never tolerate such an initiative, since it has always a) insisted that there is only one route to FTAAP, shaped by the Trans-Pacific Partnership (TPP), and b) would not welcome a Chinese move that stole momentum from the TPP process.
 
Instead, to my astonishment, within a day of the Chinese proposal, we received a fresh draft, this time jointly proposed by China and the US. What on earth had persuaded our American friends to join forces with China on this initiative? At the time, my only conclusion, probably mistaken, was that the various TPP setbacks in Bali last September, and then during negotiations in January, had persuaded the US to “hedge its bets” – to keep options open on the Chinese initiative in case TPP negotiations flounder.
 
Anyway, my prediction of a saloon-bar fight took only a matter of time. The fisticuffs in Qingdao were bruising and revealing – and ABAC found itself awkwardly in the firing line.
 
Recognising that this “pathways to FTAAP” discussion was likely to be an important one, ABAC members prepared thoughts carefully during its meeting in Santiago two weeks ago. And we were lucky to have Stephen Jacobi from New Zealand attending the meeting on our behalves, with inputs prepared. Our position on key points raised by China was reasonably simple and clear: the exercise to examine the different regional integration initiatives as potential stepping stones to our long-cherished objective of an FTAAP was a welcome one: the Chinese proposal for a feasibility study to discover the challenges in achieving the vision was also welcome: and on the issue of whether APEC should set a target date for achieving FTAAP, we agreed a) yes, a date was needed, but b) despite the tidy symmetry of setting a 2020 deadline to coincide with the supposed achievement of the “Bogor Goals”, that was probably too tight, and it was probably also premature to set a date now, when no-one even had any idea of how or whether a negotiation could start.
 
By the time I and the rest of the ABAC team arrived in Qingdao after the long journey from Santiago, the fisticuffs had already begun. US officials complained that ABAC’s positioning was “most unhelpful”. They insisted that no Feasibility Study was acceptable, since this implied a formal launch of FTAAP negotiations. They insisted that no target completion date should be set. Others supported them on this latter point, agreeing that it was easy to announce the launch of negotiations with fanfare, but altogether more difficult to hit a deadline when we had no clear idea of the obstacles between now and target completion (China had been proposing 2025).
 
It took interventions from Japan and Korea to make the reasons for the stand-off clear: essentially, the US and others negotiating the TPP – now at a critically sensitive stage – had no intention of allowing anything to happen that might compromise chances of a successful outcome in negotiations planned for Singapore this week. Less charitably, others suggested that China had timed the proposal not just to create a high profile “deliverable” from their APEC chairmanship year, but to undermine the TPP.
 
What followed in the Senior Officials meeting was one of those marvelous electrically-charged confrontations where all is politeness and mutual congratulation, all objections are in delightfully veiled code, and where discussion ends with no clear sense of what has been achieved.
 
One marvelous scene involved China’s Sherpa Tan Jian pleading for support for a Feasibility Study. I can’t quote him exactly, but his message amused everyone – except stony-faced American officials, maybe. Forgive me, he said, I have been trying so hard to study English for so many years, and of course would never be able to speak it with the mastery of the many native English speakers around the room. But when he called for a “Feasibility Study” he thought he was using the ordinary English word “feasibility”, which meant to study whether or how something (in this case potential achievement of an FTAAP) was achievable or not. He was puzzled that some believed the phrase implied any more – especially a formal launch of trade negotiations. In deference to the superior command of English of others in the room, he asked whether there was another English phrase that might mean the same thing. Such fun.
 
At the end of the Senior Officials meeting, and a long and frosty debate on the undoubtedly labyrinthine pathways to FTAAP, no clear agreement had been reached. From the US point of view ABAC was in the “dog house” for having supported a Feasibility Study, and for wanting a fixed date. Officials remained in huddle as they prepared for the Trade Ministerial Meeting and while I rushed for the airport on Friday. As of Tuesday, I have still to discover whether peace and agreement was achieved. I have still to discover whether the fresh round of negotiations on TPP achieved success or not. Fascinating developments nevertheless.
 

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