Two weeks after the American people formally interred the trade pact by electing Donald Trump, a front-page Wall Street Journal headline said it all: “China Steps In as U.S. Retreats on Trade.” Momentum has intensified for the TPP’s Chinese-led alternative, the Regional Comprehensive Economic Partnership, which has been under negotiation since 2011. Japan and Australia, two of America’s staunchest allies in the region, have stated their desire to conclude the RCEP as quickly as possible.
This seems likely to happen. And when it does, a huge 16-member trade bloc will emerge that includes the world’s two most populous countries, its second, third and seventh-largest economies, and its largest Muslim nation—but not the U.S.
No doubt east Asian and Pacific countries still will look to the American military as a counterweight to China’s growing power. Some will pursue new bilateral economic arrangements with Washington. But make no mistake: We are witnessing a hinge moment in which the U.S. surrenders the economic and diplomatic initiative to the region’s rising hegemon.