The Trans-Pacific Partnership: Japan, China, the U.S., and the Emerging Shape of a New World Trade Regulatory Order

The role and shape of international trade agreements is changing. No longer simple devices for easing the movement of goods across borders, they are becoming both an instrument of integrated economic regulation at the supranational level and a tool of international relations within the emerging global economic order. The recently expanded scope of negotiations over the Trans-Pacific Partnership (“TPP”) serves as a case in point, one that focuses both on the trilateral relations between Japan, the United States, and China, and on the form of competition for control of the language of supranational economic regulation. The focus of this Article is on the decision by Japan to join the U.S.-led negotiations for a Trans-Pacific Partnership, even as it pushes ahead with a Free Trade Agreement with China and Korea. This decision represents a critical new aspect of Japanese trade relationships that is likely to have significant economic and geopolitical effects. I will first describe the TPP from its genesis as an effort by Brunei, Chile, New Zealand, and Singapore to better integrate their economic relationships into current efforts to create a powerful free trade area of the Pacific that excludes China. I will then elaborate on the central strategic considerations that follow from this important decision in the relationships between Japan, the United States, and China, with emphasis on the way in which this affects contests for control of international rulemaking within the structures of economic globalization. For Japan, the TPP may represent a means to use a necessary containment of its own policy autonomy within complex ∗ W. Richard and Mary Eshelman Faculty Scholar & Professor of Law, Professor of International Affairs, 2012–13 Chair, University Faculty Senate, The Pennsylvania State University. This paper has been presented to workshops at The Pennsylvania State University, School of International Affairs, April 3, 2013, and the University of Arizona James E. Rogers College of Law, March 26, 2013; it was first presented to the Japan America Society of Pennsylvania, Pittsburgh, PA, March 21, 2013. My thanks to the excellent comments and suggestions by the participants at each. Special thanks to my research assistants Keren Wang (Penn State MIA 2013, Ph.D. Candidate, Penn State School of Communications, Arts and Sciences) and Nabih Hadad (Penn State MIA 2013, Ph.D. Candidate, Michigan State University School of Education). Washington University Open Scholarship 50 WASHINGTON UNIVERSITY GLOBAL STUDIES LAW REVIEW [VOL. 13:49 networks of multilateral arrangements to protect its sizeable investment in China, at least temporarily, and to permit it to leverage its power to influence global trade rules. For the United States, the TPP presents an opportunity to leverage power as well, by creating an alternative to the World Trade Organization (“WTO”) for moving trade talks forward in ways that serve U.S. governance interests more comprehensively. For China, the TPP represents an additional layer of containment, meant to constrain its economic power and to limit the value of the country’s form of state capitalism. The TPP represents the next wave of plurilateral comprehensive agreements that will shape the framework of global economic governance. It also suggests the growing importance of international agreements as the space within which the structures of economic regulation will be determined, to the detriment of state power. Within these structures, the TPP also reaffirms that Japan stands uncomfortably close to the fissure that separates the United States from Chinese interests, and must continue to rely on the internationalization of rulemaking to protect its interests. An independent path for Japan is unlikely to be an option worth considering.