Event Summary
In a speech to the conference on Asia-Pacific Regional Economic Integration and Architecture in New Zealand, C. Fred Bergsten stressed the importance of moving in parallel on Asia-Pacific trade liberalization simultaneously with similar movements in Asia itself. The challenges to Asia-Pacific economic integration are increasingly important and intense because Asia itself is clearly headed toward greater regional integration, both in terms of trade and monetary policy. An Asia bloc has huge implications for the rest of the world. It will discriminate against outsiders causing negative economic effects on them, raising the specter of "drawing a line down the middle of the Pacific." Such potential division between Asia and the United States would have consequences ranging beyond the economic and would eventually spill over into political and security areas. This would be particularly worrisome for countries in the region who have close ties with both the United States and their Asian neighbors.
The move toward a Trans-Pacific Partnership (TPP), perhaps eventually a Free Trade Area of the Asia Pacific, should be viewed as complementary to the Asia-only initiatives. This first positive trade initiative by the Obama administration, by joining the Trans-Pacific Partnership negotiations, provides a real and important opportunity for Asia to reengage the United States. Bergsten recommends setting a specific goal to reach agreement on at least an initial Trans-Pacific Partnership arrangement by the time of the APEC Summit hosted by the United States in Hawaii in late 2011.