Hidden behind thickets of acronyms and gorse bushes of detail, a new great game is underway around the globe. Some call it geoeconomics, but it's geopolitics too. The current power play involves an extraordinary range of countries simultaneously sitting down to negotiate free trade and investment agreements. Think of it as EBC: Everyone but China.
The biggest of these negotiations got underway this week as a European Commission delegation sat down with its U.S. counterparts in Washington. The deal they're trying to thrash out is currently called TTIP, for Transatlantic Trade and Investment Partnership. That's a terrible acronym. (Want to be on the TTIP, anyone?) The first thing negotiators should do is to change the name to TAP, for Trans-Atlantic Partnership.
TAP would then neatly complement TPP, for Trans-Pacific Partnership, the other biggest show on the Broadway of geoeconomics. Total transatlantic trade and investment is estimated to be worth about $4.7 trillion. The proposed TPP region, a diverse grouping currently slated to include the U.S., Canada, Mexico, Australia and Japan, as well as Vietnam and Brunei, accounts for about one-third of world trade. There are also ongoing EU-Canada and EU-Japan negotiations, and both the U.S. and the EU are trying to intensify their trade and investment relationships with countries such as India and Brazil.
With glorious can-do American optimism, the White House is describing its big push to establish a transatlantic trade deal as a job for "one tank of gas." That apparently means wrapping it up before the congressional midterm elections in 2014.
Well, American cars have big petrol tanks, although it has also to be said that, like SUVs, the U.S. Congress gets pitifully few miles to the gallon. On the European side, that "one tank of gas" would take us to the end of the current European Commission and Parliament. Most of the other talks, including those on a Pacific deal and agreements between the EU and Canada and Japan, are also looking toward 2014.
It's possible the deals won't happen. The recent history of trade talks is a history of stalling or, to stay with the Obama administration's metaphor, of running out of gas. The fact that most of the countries involved in the current talks are democracies only makes it more difficult. The way contemporary democracies work, they excel in aggregating the special needs of interest groups, both monied interests (corporations, sectoral lobbies) and electorally important ones, such as farmers. And the EU is itself an aggregation of 28 such national aggregations. It is no accident that Brussels competes with Washington for the title of lobbyists' nirvana.
But just imagine that, with politicians' minds unusually focused by years of global recession and the rise of China, it did all come together. This would be huge in two ways: in its potential gain for the world economy and as a challenge to China. To mark the 100th anniversary of 1914, we would be getting back to something like the free-trading world we had before 1914 — but on a larger scale, with less formal colonialism and with more complex and deeper forms of interconnection.
Not everyone would be a winner, but the potential benefits are enormous. The economists' projections must be taken with a large pinch of salt, but just to give you an idea: According to a study commissioned by the Bertelsmann Foundation, TAP — or TTIP, if you insist — could mean a long-term increase of more than 13% in GDP per capita for the U.S., and average real income growth per capita of 5% for the EU — with no less than 10% per head for Britain. The European Commission estimates that an EU-Japan deal alone could result in the creation of 400,000 jobs.
For a European Union with nearly 6 million unemployed young people, that is not nothing. Done right, the expansion of free trade and investment is about as close as we get in human affairs to a "win-win." So turn on the TAP, I say, and all those other faucets.
But this is also, let's not kid ourselves, a geopolitical challenge to China. Americans know this. (It's one of the things some of them like about it.) Europeans know it. Japanese know it.
The Chinese know it too. An article in the Washington Quarterly by Guoyou Song of Fudan University in Shanghai and Wen Jin Yuan of the University of Maryland reports a "strong voice in Chinese academic and policy circles" characterizing TPP as an American tool to contain China's rise. Yet the conclusion of their very sober analysis of the many interests and lobbies shaping Chinese policy is intriguing: "It is worth pointing out that China has not closed its doors toward the possibility of joining TPP itself. If the Chinese government feels that the benefits of joining outweigh the costs, then China may indeed apply."
This is where economics and politics could actually combine, in a way that is — if Chinese communists will pardon such an old-fashioned expression — dialectical. The trade deals are a challenge to China, but they also might be an incentive. If China were to decide that it wanted to join a network of proper free-trade and investment areas, and actually play by the rules, and the West were then to say no, we would be behaving almost as irresponsibly as European leaders did in 1914.
Our ultimate objective in this new great game must not be an "Everybody but China" bloc. Rather, these free-trade areas should be seen as building blocks of a liberal international order that could include and embrace China. China would obviously then have a right to help shape that order, but its participation would also eventually help to move China domestically toward more openness, pluralism and rule of law, as desired by a growing number of its own people. Welcome to the dialectics of TAP and TPP.
Timothy Garton Ash is professor of European studies at Oxford University, a fellow at the Hoover Institution at Stanford University and a contributing writer to Opinion. His latest book is "Facts Are Subversive: Political Writing From a Decade Without a Name."