Shipping containers from China and other Asian countries are being unloaded at the port of Los Angeles while the trade war between China and the United States rages on September 14, 2019 in Long Beach, California. –
Mark Ralston | AFP | Getty Images
SINGAPORE – According to a former foreign affairs adviser, the Biden administration is likely to need to reconsider the future of US economic leadership in the Asia-Pacific region after two massive free trade agreements signed by countries in the region.
The first of the two trade deals is the Trans-Pacific Partnership (TPP): it was negotiated by the Obama administration but never approved by Congress. President Donald Trump pulled the US out of the TPP in 2017 when the remaining 11 countries renegotiated and a year later signed the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP).
More recently, 15 countries including China, Australia, Japan, South Korea and Southeast Asian countries signed the Regional Comprehensive Economic Partnership (RCEP): It is the world’s largest trading bloc with a market of 2.2 billion people and 26.2 trillion US Dollars global production – about 30% of world GDP.
“So far, the new administration has not decided in one way or another about the future of the TPP,” Richard Fontaine, CEO of the Center for a New American Security, told CNBC’s Street Signs Asia on Tuesday. Fontaine previously served as a foreign policy advisor to Senator John McCain and served in the US State Department.
He stated that President-elect Joe Biden and his administration will enter an era when the US has not joined the TPP or the RCEP. “You have to at least consider what the future of US business leadership in Asia will look like,” he said.
According to Fontaine, a big change between the Trump administration and the incoming Biden administration would be their approach to multilateralism.
“The President-elect and his team have been eager to say how they will work with partners and allies, as well as like-minded countries around the world, on key issues ranging from climate change to global health and the pandemic to China and all other kinds of Things, “said Fontaine.
Trade, on the other hand, is still a complicated domestic issue, he said. While the Biden administration would never have imposed many of the tariffs imposed by Trump, including US taxes on China during the trade war, it will inherit those policies next year, Fontaine said.
Biden and his team have announced that they will review tariffs when they take office, and may do so with allies and partners in the US, possibly with a view to developing “a common approach,” he added.
Whether the tariffs imposed by the Trump administration on China are maintained or relaxed would “set the tone for US-China relations in this (Biden) administration for quite a while,” said Fontaine.
Experts previously told CNBC that Biden would be constrained by the political environment and may not have recourse to some of China’s positions that it held in the past that were viewed as relatively weak.
So far, The Biden-Harris transition team on their website said The future administration’s top priorities include tackling the coronavirus pandemic, leading the way in US economic recovery, and combating racial justice and climate change.