Dive Brief:
- Trade representatives from 14 countries — the 12 countries who signed the Trans-Pacific Partnership (TPP) plus China and South Korea — will meet to discuss the future of Asia-Pacific trade in Chile on Tuesday and Wednesday, after the death of the trade agreement and rise of China's Regional Comprehensive Economic Partnership (RCEP).
- Chile's trade representative on Friday said the talks sought to discuss a potential replacement to the TPP. The country spearheaded the meeting, seeking to determine whether the original terms were too fluid, or if existing partnerships like Latin America's Pacific Alliance or the RCEP were preferred paths forward.
- China, however, claims the meeting is not just about the TPP, but about greater regional integration altogether. The company has notably sought to take the lead in the region since the U.S. withdrawal from the TPP.
Dive Insight:
This week's meeting in Chile seems like a proxy war between the U.S. and China over economic dominance of the Asia-Pacific region, but the U.S. is at a significant disadvantage. The U.S. will be represented by its ambassador to Chile, but the representative's hands are tied on actual policy since President Donald Trump's nominee for USTR is yet to be confirmed by the Senate.
The administration has implied it prefers bilateral trade agreements over multinational trade deals, and China is taking advantage of that as a new advocate for multinational trade. The talks are non-binding, and may just be the start of a long negotiating process. However, the events will help signal how willing the U.S.' former TPP partners are to follow China's lead.
Key partners like Japan, for example, continue to push for regional integration over bilateral deals. Similarly, countries like Mexico and Canada are facing the challenge of ensuring the U.S. sticks to trilateral negotiations for the upcoming NAFTA 2.0. Mexico and Canada will also be at the talks in Chile this week.
Supply chains may not be in immediate danger of disruption, but the week's events mark a new stage of Asia-Pacific trade relations where China may take the place of the U.S. as negotiator in chief.
