And what does that mean? Free Trade Area of the Asia-Pacific. The United States would be a member. At the Asian-Pacific Economic Cooperation summit this weekend in Japan, leaders formalized an agreement to begin the process to create a free trade area along the Pacific rim. This would be, far and away, the largest free trade bloc on the planet. Upon formation of the FTAAP, adjectives such as cute, quaint and charming would best describe any other free trade association.
The trade bloc would include the following countries: Australia (13th largest economy) , Brunei (118th), Canada (10th), Indonesia (18th), Japan (3rd), Korea (15th), Malaysia (40th), New Zealand (52nd), Singapore (43rd), the Philippines (48th), Thailand (33rd), the United States (largest), China (2nd), Mexico (14th), Papua New Guinea (129th), Chile (46th), Peru (51st), Russia (12th) and Vietnam(58th). If this were only the world’s three largest economies alone (US, China and Japan) would make this groundbreaking. And that all of the other major global economies that are involved in this only makes it more so.
It’ll take about ten years to plan and negotiate, and it’s not going to be perfect, at least not initially. And there’s bound to be lots of opposition, not only in the US, but in many other constituencies in the aforementioned countries. Some people will lose out if free trade is in place. Remember Ross Perot’s obsession with American jobs going to Mexico? Well, we’ll see some of that, only the opposition will talk about jobs going to Vietnam and China. But those jobs are going to go anyways, eventually. It’s in sectors of the economy that are more technology, information and service oriented that are going to be the jobs of the future, not steel and textile workers.
Free trade grows economies, and it creates more jobs than it destroys. Plus, when you link economies in such a fashion, the idea that they would go to war becomes ever harder to envision. Still not impossible, but who wants to invade their biggest client? With China-US relations set to become the diplomatic focal point of the next century, a free trade agreement with that country would be in the best interests of both countries.