Transcript The Economic and Social Impact of Chinese Investment in Turkey

Transatlantic Trade and
Investment Partnership:
A View from Asia
Dr. Altay Atlı
Bogaziçi University
Asian Studies Center
TASAM 4th Turkey-Europe Forum
Istanbul, November 21-22, 2013
Global trade
• WTO negotiations stalled.
• Recent wave of regional trade integration efforts.
• Transatlantic Trade and Investment Partnership (TTIP).
• Trans-Pacific Partnership (TPP).
• Regional Comprehensive Economic Partnership (RCEP).
• Bilateral free trade agreements.
TTIP
TTIP + TPP
TTIP
• Reciprocal market opening between the US and the EU, and
enhanced cooperation in market regulation will have a
considerable impact.  Growth, welfare and employment for
both the US and the EU.
• TTIP as a renewed, economic NATO.
• Attempt to rewrite global trade rules in line with the economic
principles and political values of the US and the EU.  Liberal
rule-based capitalism and democracy as opposed to the
growing influence of state-led capitalism.
• Renewed impetus after the global financial crisis.
• Bilateral linkages with Asia.
TTIP
The geopolitical
dimension of TTIP.
“But this is also, let us not
kid ourselves, a
geopolitical challenge to
the Chinese Communist
party… American know
this. Europeans know it.
The Japanese know it.”
(Timothy Garton Ash, The
Guardian,10 July 2013).
Source: US National Intelligence Council.
TPP
• Significant market access potential, particularly for Asian
countries.
• Bilateral agreements connecting TPP with TTIP.
• China is not included.
• Access to the growing Chinese market?
• Sourcing components and intermediary goods from
China?
• Regional production networks?
TPP
• Pragmatic approach by Asian countries.
• TPP.
• Bilateral trade agreements with the EU.
• EU has reached agreements with South Korea and
Singapore, and is conducting negotiations with
Japan, India, Vietnam, Malaysia, and Indonesia.
• RCEP.
• ASEAN 10 + 3 (China, Japan, South Korea) + 3
(Australia, New Zealand, India).
• Negotiations started in November 2011. Expected to
be completed in 2015.
China’s reaction against TTIP + TPP
•TTIP + TPP is likely to reduce China’s competitive power in both
the US and European markets.
•TTIP + TPP is likely to reduce China’s influence in Asia, albeit to a
limited extent.
•Geopolitical consequences at a time when both the US and the
EU have their own “pivot” to Asia.
China’s reaction against TTIP + TPP
•“The strategy is clearly targeted at China” (Wang Yong, Beijing
University).
•“TTIP will become the base of new international trade and
investment rules, thereby affecting the entire global regulatory
process. Together with the TPP, the impact on China will be a
significant increase in the cost of participation in globalized
markets.” (Wang Yiwei, Renmin University).
•“Once the TTIP is completed, the world trade landscape must
be redrawn and the multilateral free trading system might be
replaced by a cold war on the trade front, featuring two divided
camps of mutual hostilities and trade wars. One camp is led by
the US, supported by the EU, and the other is led by China,
supported by some developing countries.” (Zhang Xiaotong,
Wuhan University)
What does it mean for global economic governance?
•Regional integration serves global economic governance only if
they lead to multilateral liberalization of trade by establishing
rules and norms; by connecting rather than separating regions.
•China is a major actor in the global economy.  The key
question about the future of the global economy is how
successfully the major economies of the world will act WITH (and
not AGAINST) China.  Cooperation instead of protectionism.
•At its current shape, TTIP + TPP does not promise this.
•China’s response will be important in determining the impact of
TTIP + TPP on global economy. With its increasing market
demand, continuing growth prospect and ongoing economic
restructuring, China has bargaining power in the negotiations
toward a rewriting of global trade rules.
Alternatives for China
• Alternative A: Stay away from this US initiative and set up its
own version and/or invest in RCEP.
• China will face remodeled western rivals.
• Greater focus on BRICS.
• Economic polarization at a global level.
• Alternative B: Wait and see the progress with TTIP+TPP, and
actively participate in the global free trade negotiations.
• Accelerate domestic market reforms to meet the higher
standards of international trade rules.
• Improve relations with other emerging economies in order
to have a stronger position in the process of rewriting
international trade rules.
• Better option for global economic governance.
Transatlantic Trade and
Investment Partnership:
A View from Asia
Dr. Altay Atlı
Bogaziçi University
Asian Studies Center
TASAM 4th Turkey-Europe Forum
Istanbul, November 21-22, 2013