The Economics of Strategic Containment
NEW DELHI – At their recent summit in Cannes, the G-20 shelved, if not buried, the World Trade Organization’s moribund Doha Development Round of multilateral trade negotiations. Crisis-weary Europe and America face a rising tide of protectionism at home, and are trying to find ways to blunt the edge of China’s non-transparent trade competitiveness.
Turning his attention from the Atlantic to the Pacific, US President Barack Obama – with his eye, once again, trained on China – has now unveiled a new regional trade initiative. Why was the US unwilling to move forward on the Doha Round, but willing to pursue a regional free-trade agreement?
The answer lies in the fact that the Trans-Pacific Partnership (TPP), launched by Obama and the governments of eight other Pacific economies – Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, and Vietnam – is not just about trade.