Panel, Conference Presentation
Is the Pacific Future Happening Now?
- A strategic rebalancing toward the Pacific is anticipated, with the Trans-Pacific Partnership (TPP) expected to become the world's largest free trade agreement, representing 40% of global GDP and comprising 12 countries with a potential to include Taiwan, South Korea, Colombia, and potentially China subject to reforms on state-owned enterprises.
- The TPP and the prospective Transatlantic Trade Investment Partnership (TTIP) are projected to collectively cover two-thirds of the global economy, creating a bloc of 3.2 billion middle-class consumers by 2030 out of a global population of 4.9 billion, while the Chinese middle class is expected to triple from 200 million to 600 million within five years and China and India combined are forecast to represent 40% of the global consumer market by 2030.
- To counter China's 17 existing regional free trade agreements and its dominance in writing regional rules, the TPP is viewed as a mechanism to compel China to accelerate economic changes regarding transparency and rule of law, though Indonesia's population is projected to reach nearly 300 million by the time it surpasses the U.S. and Japan faces an unsustainable demographic ratio of 1.25 employees per retiree by 2030.
- The Asian Infrastructure Investment Bank (AIIB), which has 57 signatories and faces $8 trillion in infrastructure needs over the next decade, is a point of contention where the U.S. has not joined for geopolitical reasons but may join if standards are met, with Japan needing to overcome domestic political pressure on agriculture to finalize the TPP.
- Passage of U.S. Trade Promotion Authority (TPA) by Congress is deemed critical to enabling a direct vote on the TPP, which David Dreyer and Stefan Selig expect to occur to allow the deal with 11 partners to be completed, serving as a catalyst for subsequent TTIP negotiations and a buffer against potential geopolitical flashpoints in Asia.