Garrett: US 'All In' On Right Side of History vs China

The framing is not one which I would use, but it's an increasingly familiar trope nonetheless: Is the United States' model of capitalist liberal democracy becoming obsolete vis-a-vis the "developmental authoritarianism" of China? The litmus test in Asia in this regard may be coming fast as the US appears to be nearing its neo-Bushian "you're either with us or against us" moment in the preferential trade agreement realm. Hillary Clinton recently suggested as much. However, I seem to have missed political economy stalwart Geoffrey Garrett's take on Obama going "all in" or betting everything regarding the Asia-Pacific via the much-ballyhooed Trans-Pacific Partnership (TPP) expansion bid. (When we last saw Garrett in these parts, he was talking about a G-2 US-China compact emerging in global governance.)

It's curious as to why Garrett penned write this article for probably the most bellicose of China's state-supported publications, the Global Times, when it suggests Chinese not American overreach. For what it's worth, though...

[T]he US is insisting that this will only be possible if China is willing to play by what Obama called "the rules" set by the US, which he claims are widely accepted in the region. As every poker player knows, going "all in" is the ultimate high risk and high reward gambit. You can win big, in this case having China accede to the US demands regarding opening its economy, giving larger political freedom to its people, and ending its territorial disputes in the region.

But you can also lose everything. Here Obama's gambit risks not only alienating China but also increasing the chances of conflict with China. Only the confident risk going all in. Obama's confidence stems from his belief that "history is on the side of the free - free societies, free governments, free economies, free people."

So far so grandiloquent. Which is par for the course for US officialdom almost by definition. But, the reasoning offered is that while China's trade ties with others in the region are growing and in many cases now outstripping their ties with the US, uncertainty about China's territorial designs gives the US a benefit of the doubt that it's using advantageously:

This statement is more than blind faith. Obama reasons that the trajectory of change is on the US side. While China has booming trade relationships with many countries in the Asia Pacific, including longstanding US allies led by Australia, Japan and Korea, there is still widespread unease in the region about China's ultimate intentions and ambitions.

In contrast, despite the big hits the US brand has taken, most Asian nations seem interested in even tighter ties with the US. This includes not only traditional allies but also new friends like India, Indonesia and Vietnam. The US calculation is that its coalition in the Asia Pacific is not only invulnerable to China's rise, but that it is so powerfully magnetic that bit by bit it will socialize China into joining, and changing itself in the process.

Add in the obligatory self-serving contrast between the US and China:

This socialization strategy is most obvious regarding economics and the TPP. Obama told his audience in Canberra "we need growth that is fair, where every nation plays by the rules; where workers rights are respected and our businesses can compete on a level playing field; where the intellectual property and new technologies that fuel innovation are protected; and where currencies are market-driven, so no nation has an unfair advantage." Although he didn't mention it by name, the specific issues Obama raised were no doubt directed at China.

Obama also went out of his way to talk up the importance of domestic political freedoms, claiming that "certain rights are universal, among them freedom of speech, freedom of the press, freedom of assembly, freedom of religion, and the freedom of citizens to choose their own leaders." And in an even more direct challenge to China, Obama asserted that "prosperity without freedom is just another form of poverty."

We then return to the commingling of security and economic concerns that I'm not so fond of...

Obama has laid down the gauntlet to China, saying that its booming trade ties must be underpinned by its acceptance of the values he believes the rest of the region holds dear. And he thinks, over time, China will agree.

Obama probably thinks this is a smart bet for three reasons. The US debt-induced military spending cuts won't curtail its capacity in Asia. China is unlikely to respond decisively until its new leadership team is firmly in place. And most importantly, it is in China's interests to move in the direction Obama wants. Time will tell if he is right.

For a different point of view, see Jagdish Bhagwati. To him, TPP is not a virtuous call for a level playing field but the ultimate trade diversion. Not only does it isolate China, but it also largely rules out the PRC ever joining according to the Columbia professor. While my thinking is more in line with that of Garrett--the US hopes to create sufficient bandwagon effects that China will want to come on board and play by the (American) rules--my belief is that Garrett far overestimates America's residual influence in the region. Witness, for instance, Japan signalling that it will join TPP negotiations--to appease the Americans--while knowing that little is likely to come out of them given the strength of its domestic agricultural lobby. That bit of Yank appeasing done, their leader then inks a deal to cement the use of RMB in regional transactions and for Japan to purchase RMB bonds to boot over Christmas. Note that these are not mere discussions alike TPP expansion but concluded agreements. Money talks.

Just as North Korea makes displays of bellicosity when in times of trouble to attract attention, American sound and fury is unarguably becoming a more common sight and sound these days. If that doesn't signal terminal decline, you tell me.