What is TPP and Should China be Worried?

Jan 23, 2021

A decision just taken in the United States could soon have deep consequences for the emerging economies of the Pacific, and, crucially, China. Politics in the United States is not a straightforward affair. However, last week, politicians from both aisles of American politics were united in a shared ideal. On Wednesday, the United States Senate passed a measure into law. The new legislation passed by 60 to 38, and it is set to change the nature of world trade. The Senate has now enabled President Obama to ‘fast-track’ negotiations for the implementation of the TPP. There has been a serious lack of widespread mainstream press coverage over this new deal, and a veil of secrecy has remained draped over it. But what exactly is the TPP? And why, if at all, should China be worried about it?

What is TPP?

TPP stands for the Trans-Pacific Partnership. It is an upcoming deal, many months in the making, that is designed to significantly expand America’s trade status in the world. TPP stands for the Trans-Pacific Partnership. By creating the agreement, the United States hopes to increase exports of American goods. TPP is a free trade agreement between the United States and 11 other countries, designed to boost American imports into new markets.

Who is involved in TPP?

Though negotiations are still on-going, the participants of the deal have already been determined. The 11 countries span Asia, Oceania, and the Americas, and they include Chile, Mexico, Peru, Singapore, and Vietnam.

Why should China be worried?

By launching the TPP, the United States in unashamedly raising its economic fists to China. The Pacific is on Asia’s eastern fringe, and may be considered China’s economic zone of control. This may not last long. The United States has declared, clearly and strongly, its intention to poach China’s trading partners, by ‘setting up shop’ in what is essentially their economic backyard. The significance of this can not be overstated. These countries account for a staggering 40% of the entire global economy. If the US successfully pushes this through, the consequences could be vast. It is too early to see if TPP could pose a significant risk to Chinese trade in this region. But as the finalisation of the deal draws ever closer, China’s established dominance may be soon called into question.

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