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Obama: China 'Put Out Feelers' on Joining TPP


U.S. President Barack Obama speaks during a town hall meeting with Young Southeast Asian Leaders Initiative Fellows (YSEALI) at the White House, June 1, 2015.

President Barack Obama says China has started to "put out feelers" about possibly joining the new Trans-Pacific trade agreement.

Obama told public radio's Marketplace Wednesday, "If we have 11 of the leading economies in the Asia-Pacific region who have agreed to enforceable labor standards, enforceable environmental standards, strong I.P. [ internet protocol ] protections... then China is going to have to at least take those international norms into account."

The president said Chinese officials have reached out to the White House and Treasury Secretary Jack Lew and suggested Beijing does not want to be left out of the TPP's comprehensive scale and scope.

"The fact is, if we have 11 of the leading economies in the Asia-Pacific region who have agreed to enforceable labor standards, enforceable environmental standards, strong IP (intellectual property) protections, non-discrimination against foreign firms that are operating, access to those markets, reduced tariffs, then China is going to at least have to take those international norms into account. "

The Trans-Pacific trade deal, which is still being negotiated, would bring together at least 12 Asia-Pacific nations, including the United States.

Obama says the U.S. still engages China on a bilateral economic level on issues surrounding its currency, subsidies and intellectual property theft. But he adds it would help if the world's second-largest economy was surrounded by countries operating under high standards. He said that results in a level playing field that will help America shape international commerce for a long time.

China very interested

TPP negotiations, when concluded, will governm 40 percent of U.S. imports and exports. The countries involved accounted for about $1.5 trillion worth of trade in goods in 2012 and $242 billion worth of services in 2011. They are responsible for 40 percent of the world's gross domestic product (GDP) and 26 percent of global trade.

Charles Morrison, president of the Hawaii-based East-West Center, says China has expressed interest in the TPP for the past two years.

"They're very interested in the TPP process an dI think they assume at some point that, it will set benchmark standards that they will want to meet themselves," Morrison said.

"There are lots of standards for any industry or for the general facilitation of trade that are very important to have a smooth harmonious trading system, and what TPP tries to do is address the cutting edge issues of thie century and set up a framework in which trade and economic activity will flourish."

Morrison says he does not expect China to join TPP anytime soon. When it does, he believes it will be more open and competitive.

Congressional approval

Obama has made Congressional passage of a final deal a major goal. He is also pushing Congress to give him fast-track authority -- allowing him to negotiate conditions in trade agreements without the need for Congressional approval.

Many Democrats oppose fast-track, saying the North American Free Trade Agreement that took effect 20 years ago, sent many American jobs to Mexico and had no environmental standards or protection for workers.

"There's always been opposition to free trade agreements, they're always controversial," Morrison said. "There are always winners as well as losers and all voices need to be heard, and that's part of the democratic process in the United States. "

Obama needs more than two dozen of 188 House Democrats, who are concerned about the potential loss of jobs and wages, to pass fast-track promotion authority, which is seen as crucial for the future of the TPP.

Loss of jobs in US

In his radio interview Wednesday, the president acknowledged globalization and technological advances have played a role in reducing the leverage of workers and labor unions and resulted in the outsourcing of jobs.

But he said opponents to a Pacific trade deal have to stop fighting "the last war" and that the U.S. is creating new rules that raise standards in an important part of the world. If the U.S. is not shaping the rules in Asia, China will, Obama said.

"We can't just draw a moat and pull up the drawbridge around our economy. We are completely woven into the global economy. We are the hub to many, to a large extent, of the global economy," the president said.

Obama said the U.S. will potentially have hundreds of millions of workers now subject to international standards that were not there before. And even if they are not enforced 100 percent of the time, there will be leverage to start raising those standards and that is good for American workers.