China’s interest grows in joining an Asia-Pacific trade deal
The Hill | 17 Sep 2013
China’s interest grows in joining an Asia-Pacific trade deal
By Vicki Needham
China’s tnterest in eventually joining an Asia-Pacific trade agreement is growing considerably, U.S. business officials say.
A mere four months ago, the Chinese government was referring to the Trans-Pacific Partnership (TPP) as part of an "insidious" trade scheme by the United States designed to keep China from gaining global ground.
But now Chinese officials are talking more positively about the idea, especially since Japan joined the talks last month.
"They are actually discussing it and it’s a remarkable shift," said Tim Stratford, the managing partner at Covington and Burling’s Beijing office.
"The viewpoint has changed and there are far more positive words that it’s the wave of the future," said Stratford, a former assistant U.S. Trade Representative, who advises international clients on doing business in China.
Leaders of the TPP’s 12 nations have said they plan to finish the trade deal by the end of the year.
But Stratford, who is in Washington with other members of the American Chamber of Commerce in Shanghai canvassing Capitol Hill about the business environment in China, said U.S. businesses in China are more focused on quickly working out a bilateral investment treaty (BIT).
The BIT issue has already given businesses "a lot to think about" leaving the TPP, for now, on the back burner.
Business leaders said forging a BIT deal would go a long way toward providing greater market access in China while putting more pressure on the Chinese to open the door further and address other business obstacles.
They said BIT is almost a World Trade Organization 2.0, providing the first major fresh round of reforms since China joined that global trade group in 2001.
Completing the investment deal could provide China the momentum it needs to eventually join the TPP and is another signal that China’s President Xi Jinping is serious about reforms.
In addition, the Chinese are talking about a free trade zone in Shanghai, which Stratford said has been referenced as a pilot program that would provide a stepping stone for China to the TPP.
Although few details have been provided as to what the new zone would mean for U.S. businesses.
Overall, AmCham officials say U.S. industry is doing well in China and they are encouraged especially by the 20 percent annual rate of income growth, which is leading to an expansion the nation’s middle class and a desire for U.S. products being made and distributed throughout the Communist nation.
In fact, Bob Theleen the chairman of AmCham Shanghai and chairman and CEO of ChinaVest, said the income growth is watched more closely than falling gross domestic product.
He also said that U.S. businesses are learning to better manage and protect their intellectual property, which has been a top concern among trade-centric lawmakers on Capitol Hill.
With budget talks still in flux on Capitol Hill, Kenneth Jarrett, president of AmCham Shanghai, said his group’s main concern is ensuring that lawmakers properly fund trade functions at the Commerce Department and especially within the U.S. Trade Representative’s office.
U.S. Trade Representative Michael Froman has made clear that his office needs more resources to make their global outreach.
"We’re making the case for adequate funding," Jarrett said. "Without it, it’s a tremendous disservice."
