Parallel Trade Agenda to Benefit Both Countries

A parallel trade agenda between China and the UnitedStates is essential for the expansion of global trade liberalization, accordingto the former World Bank president Robert Zoellick. 

Speaking to China Daily in Shanghai,Zoellick said it is important for the world's largest two economies to push aheadwith service sector reforms via the World Trade Organization, even if the US expands itsinvolvement in the Trans-Pacific Partnership Agreement, a free trade pacteffective within an exclusive bloc of nations. 

The creation of the TPP has been controversial becausenegotiations surrounding its expansion have largely been taking place insecret. 

Originally launched in March 2010 by Singapore, New Zealand, Chile and Brunei, its newermembers are Australia, Peru, Vietnam, Malaysia, Mexico, Canada, Japan, and the US. 

"There are worries that the TPP is being seen ascontainment of China.But I say that's illogical because China is so integrated into East Asia," hesaid. 

Chinese manufacturers say they are facing strongheadwinds from the enlarged TPP and the agreement may trigger a flow ofindustrial investment to member states where labor costs are lower than in China. 

But according to Zoellick, Washington should supplementany other regional trade deals it has with strengthened trade ties withBeijing, with both sides pushing to remove trade barriers via a multilateralapproach, such as that promoted by the WTO. 

"I always believe that you can combine bilateral,regional and global efforts. 

"Even if the US makes regional movements, it still depends on the willingness of majordeveloping countries like China to take concrete steps at the global level," he said. 

It is vital to move beyond talk and take action, headded, forecasting the TPP is still a long way from being finalized andattending parties aren't anywhere close to making tough decisions ondeals. 

Jeffrey Bader, senior director for East Asian affairs onthe National Security Council during US President Barack Obama's first term,has said the TPP would "give some momentum to free trade" in light ofthe deadlocked Doha Round of talks. 

Addressing the American Chamber of Commerce in Shanghai earlier this month, he said: "The idea isthat the (Obama) administration has been trying to ink a high-standard tradeagreement, and it is open to China and anyone else who is willing to negotiate." 

Zoellick said their trade relationship reflects thelarger state of Sino-US relations, and that the two parties should avoidtensions in the region that are overwhelming the potential for globalcooperation. 

"One of the unusual qualities about Sino-USrelations is that there exists a number of common security interests globally,such as energy and anti-terrorism, while the tensions are more regional andfocused on East Asian conflicts," he added. 

How global cooperation helps infuse a spirit ofreconciliation in the region shows the wisdom in handling a bilateralrelationship that is "too big to fail", Zoellick said. 

"In practical terms, if China and the US work together on a problem, it creates a basis for bringing other countriesalong, which is quite influential. If they don't, you are going to have a hardtime making progress on this cooperation." 

The same logic applies to appeasing frictions overChinese investment to theUS,a situation that is crying out for a bilateral investment treaty, Zoellicksaid. 

He believes that many sectors in theUSshould openup to Chinese investors who are keen to build market opportunities, brandingskills and technological upgrades, as they continue to "goglobal". 

Rather than observing day-to-day economic indicators,Zoellick saidChina'ssustainable growth relies on structural issues.