The Interplay of Trade and Security in the Asia-Pacific

Hot upon the heels of the historic signing of the Trans-Pacific Partnership (TPP), Asia Society Northern California hosted a panel discussion on the “Architecture of Trade: Asia and the Future of Economic Integration” on October 6. Ambassador Kim Eun Seok, former Ambassador, Energy and Resources, Republic of Korea, was joined by his fellow countryman and scholar, Seungjoo Lee, Professor of Political Science and International Relations, Chung-Ang University (Seoul) as well as by T.J. Pempel, Professor of Political Science, U.C. Berkeley, and Vinod Aggarwal, Professor of Political Science, Haas School of Business, U.C. Berkeley.

Vinod Aggarwal characterized the Trans-Pacific Partnership as a “21st century agreement” that deals with behind-the-borders issues like subsidies, labor standards, investor-state dispute settlements and regulatory issues. The Regional Comprehensive Economic Partnership (RCEP), on the other hand, is still a “20th century agreement” focused on tariffs and quotas. Unlike the political rhetoric surrounding the TPP and the RCEP, however, the RCEP may operate more like a stepping stone for countries like China that need to mature their economic and industrial policies so that they can meet the requirements of the TPP. “China cannot join the TPP . . . not because the U.S. is trying to block [China] out, but because its economy is still not sufficiently liberalized."

“I don’t believe free trade leads to peace on its own,” bluntly stated Aggarwal, to whom “trade is always political.” While most panel members agreed in principle with this position, Ambassador Kim also pointed out the remarkable turnaround in relations between South Korea and China. This, he stated, “says a lot about economic cooperation.” The rapidly warming relations between Korea and China is probably “scaring the Pentagon,” observed T.J. Pempel, and causing concern in Washington. In response, Ambassador Kim pointed out that “U.S.-South Korean alliance is strategic, comprehensive and not shakable.” Reversing China’s position on the Korean peninsula, furthermore, is a strategic aim, certainly of South Korea but also that of the U.S. Ambassador Kim and Seungjoo Lee further emphasized Korea’s complicated position vis-à-vis its giant neighbor: “China is a big neighbor with a different political system with whom we have the biggest trade relationship.”

Panelists could not yet answer as to what sectors and industries will benefit the most from the TPP. Strategically, however, the signing of the TPP has transformed the U.S. from an “offshore stakeholder” to a leading architect of the regional order in the Asia-Pacific.

Didn't make it to the program? You can view the complete footage below (1 hr., 27 mins.)

Video Clip: Will Economics Trump Politics?" (4 min., 31 sec.): Vinod Aggarwal and former Ambassador Kim Eun Seok debate the historical interplay of trade and politics in the Asia-Pacific in a conversation moderated by T.J. Pempel