At the same time, Clinton insisted that the global economic crisis
has underscored the need to "reach agreement on the rules and principles
that will anchor our economic relationships in the coming decades."
Those principles include:
- The Asia-Pacific economic system must be open--shedding
rules that restrict trade and create discriminatory markets.
Exclusive trading arrangements fragment the regional economy. It
is time for a broader Trans-Pacific Partnership that unites the
- The regional system must be a free one, in which "ideas,
information, products and capital can flow unimpeded by unnecessary
or unjust barriers." Just as the United States seeks to attract
foreign investment, so others must be open to U.S. and other
- Economic regulations must be developed transparently and communicated to all parties, rather than conjured up when convenient.
- Finally, rules must be applied fairly to all, since
"fairness sustains faith in the system. That faith is difficult to
sustain when companies are forced to trade away their intellectual
property just to enter or expand in a foreign market, or when vital
supply chains are blocked."
(This last critique was aimed squarely at China, which has alienated
investors and trading partners through its "indigenous innovation"
policies and its embargo on exporting "rare earth" metals to Japan.)
Clinton's four principles--which she first articulated
at the Asia Pacific Economic Cooperation (APEC) senior ministers'
meetings in Washington in March--are hardly original. They have been part
and parcel of the U.S. vision of an open, multilateral system of trade
and payments since the end of World War II. Then, as now, the overriding
U.S. strategic objective was to prevent the world's fragmentation into
competing, discriminatory economic--and eventually political--blocs.
What is novel in Clinton's approach is her insistence that developing
countries--which have often been granted special treatment--can no longer
be exempted from binding rules.
"In fact, all who benefit from open, free, transparent,
and fair competition have a vital interest and a responsibility to
follow the rules. Enough of the world's commerce takes place with
developing nations, that leaving them out of the rules-based system
would render the system unworkable."
The unmistakable message: no longer can developing nations like China
or India plead underdevelopment to skirt multilateral obligations. In
trade, as in other realms, they must become responsible stakeholders.
The Obama administration will find this an uphill struggle, given emerging power temptations to free ride, but it is a cause worth fighting for.
Furthermore, Secretary Clinton made it clear that the United States
considers the inclusive APEC forum--"the premier organization for
pursuing economic integration and the growth in the Asia-Pacific"--the
most appropriate setting for harmonizing trade rules and leveling the
playing field. While celebrating the pending Korea-United States (KORUS)
free trade agreement, she cautioned that the emerging "hodgepodge of
inconsistent and partial bilateral agreements," while lowering tariffs,
would "also create new inefficiencies and dizzying complexities." Rather
than form new exclusive groupings, "we should aim for true regional