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China may join the TPP…but it’ll take a while
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President Obama, in an interview with Kai Ryssdal yesterday, revealed that the U.S. and China have been in talks about the Trans-Pacific Partnership. Andy Rothman, investment strategist at Matthews International Capital Management, analyzes the impact of China joining the TPP.
On Chinese and U.S. conversations about the Trans-Pacific Partnership:
These talks, I think, are at a very preliminary stage largely because the bar that the U.S. is setting for countries to join the TPP is pretty high. At the same time, we need to keep in mind, that there’s a lot of other stuff going on out there. The Chinese and the U.S. are having much more detailed conversations about a bilateral investment treaty known as a BIT and that’s likely to happen a lot earlier than China joining the TPP.
On who writes the rules:
What China wants to do is have a hand in writing the rules. That’s really what trade negotiations are about. It’s everyone getting together and writing the rules, and in fact that’s worked really well for us in the past…since China has joined the WTO, U.S. exports to China are up more than 600 percent whereas during that time, U.S. exports to the rest of our major trading partners are only up by 100 percent.
On the U.S. including China in the TPP:
I doubt that the TPP will even come to life without China in the next couple of years. It’s going to take time, but in the meantime, we need to make sure that we keep bringing China into more trade agreements like the bilateral investment treaty, because these have always proven to be good for the U.S.
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