US Led TTP Trade Agreement will Serve as a Counter Balance to China’s Increasing Influence in Asia

Agreement

The Trans-Pacific Partnership (TTP) trade deal struck between the US and twelve Asian nations is being viewed as a victory for the US and its Asian trading partners that will counter balance China’s increasing influence in the Asia Pacific region.

The trade pact is still to be ratified by the Congress and the lawmakers in each of the trading partner nations. However, the mere fact that President Obama delivered his pledge to close the deal came as a relief to the allied nations. It was seen as a counterweight to China’s efforts in expanding its influence not only in trade but in other areas as well including its dispute over the South China Sea and establishment of a new regional bank that would compete with the western led financial institutes.

According to Bilahari Kausikan, former secretary of Singapore’s Foreign Ministry, the TTP may not be a game changer as claimed by some experts, but if it fails, it would serve as a great blow to US credibility.

President Obama stated that the trade deal had created a level playing field for the Americans. It will counter some of the effects of the slowdown in the Chinese economy, which poses a threat not only to the US but also to other regional economies in the Asia Pacific region.

The trade agreement is not likely to change China’s strategic partnership with major Asian economies, but it will serve as an important symbol of America’s growing power in Asia. “It does at least temporarily halt the seemingly inexorable waning of U.S. influence and the corresponding rise of Chinese influence in the Asian region,” according to Eswar S. Prasad, former head of the China division at the IMF and a professor of international economics at Cornell University.

President Obama had told the Australian Parliament in 2011 that it wants to play a strong role in influencing economies in the Asian region. At that time, it seemed to be just verbal rhetoric by the President that was intended to antagonize China. But, now with the finalization of the TTP agreement, the Obama administration was indeed serious with its view of a ‘pivot’ that would create balance in the region.

The stakes for the Obama administration to finalize the trade Obamaagreement became higher after China’ economic ties with American trade partners in Asia steadily expanded since the announcement of creation of a pivot for regional economic balance and stability.

The TTP agreement will strengthen America’s presence in Asia by creating a trade zone that will keep China from flexing its financial muscle to influence political issues in Asia. The TTP agreement will strengthen America’s presence in Asia and create a trade zone that keeps China from gaining more control in the Asian Pacific region.

In terms of trade competition, the TTP deal may offer only ‘slight advantage’ to the US over China. But it will allow US and allied Asian nations to wield greater political power in the region.

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