13 March 2022
Strategic competition between the two global superpowers is threatening the multilateral economic order that has delivered economic prosperity and political security to Asia and the Pacific. The core institutions, including the WTO, are under attack and the rules needed to manage a modern international economy, to cover the digital economy, investment and the role of state-owned enterprises, are yet to be put in place. Rule-making is being pushed in regional and plurilateral agreements.
The United States is positioning for economic engagement across the Pacific but the character and nature of that engagement remains unclear. China’s ambition to join the CPTPP presents an opportunity and challenge for existing members. Australia and other middle powers share a vital interest in preserving the multilateral principles that have delivered their prosperity, and dilute the unilateral exercise of economic power by big countries. There is shared interest in facilitating and encouraging US economic engagement in Asia that is multilateral in character. There is also need to enmesh China into observance of the established rules and their reform. China’s trade integration with regional partners can entrench reforms in China and lock China into international markets and rules.
Shiro Armstrong is an Associate Professor of economics at the Crawford School of Public Policy in the College of Asia and the Pacific at The Australian National University. He is Director of the Australia-Japan Research Centre, Editor of the East Asia Forum, and Director of the East Asian Bureau of Economic Research. He is also a Visiting Associate Professor at Keio University, Research Associate at the Center on Japanese Economy and Business at the Columbia Business School and Visiting Fellow at the Research Institute of Economy, Trade and Industry, Japan. He is the Australian representative on the Research Institute Network of the Economic Research Institute for ASEAN and East Asia, ERIA.