Biden could have a hard time gathering Asian countries against China

U.S. President Joe Biden may find it difficult to gather Asian “swing states” into a coalition against China, a political analyst told CNBC.

Part of that challenge stems from Biden’s promise to rebuild the American middle class — which could hamper efforts to push economic and trade policies that Asian countries would sign up to, said James Crabtree, a professor at the Lee Kuan Yew School of Public Policy in Singapore.

“What the U.S. has done traditionally is, it’s tried to use both its security and economic power to entice allies into its camp. So for instance, it set up the original TPP trade agreement,” Crabtree told CNBC’s “Street Signs Asia” on Friday.

TPP refers to the Trans-Pacific Partnership, a trade pact negotiated by former President Barack Obama and 11 other countries — most of them in Asia-Pacific, which excludes China.

The reality is that America’s economic weight is declining, China’s is increasing. And China is also doing a good pretty good job of stealing America’s clothes as the protector of free trade in the region.

The deal in its original form would have been the world’s largest trade agreement, covering nearly 40% of the global economy. It would have enhanced the strategic role of the U.S. in Asia-Pacific, and counter-balance China’s growing political and economic clout in the region.

But the agreement was widely criticized in the U.S. and never approved by Congress. Detractors — which include former President Donald Trump — said the TPP would accelerate the decline of U.S. manufacturing and hurt American workers.

Trump pulled the U.S. out of the deal in 2017 and the remaining 11 countries renegotiated and signed an agreement renamed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP.

Domestic pressure could continue to challenge attempts by the Biden administration to strike deals that would attract the region’s major exporting economies.

“Biden has promised a trade and economic policy which is only going to benefit the American middle class,” said Crabtree.  

“If he actually does that, it’s much more difficult then to try and strike economic agreements with … the big Asian exporting countries that are the swing states against China. It’s much more difficult for the U.S. to entice them into a broader anti-China alliance,” he added.

China’s growing influence

Over the last few years, China has expanded its influence in Asia-Pacific as the U.S. appeared to be pulling back from the region under Trump’s leadership.

One major development that boosted China’s standing was the signing of the Regional Comprehensive Economic Partnership or RCEP — the world’s largest trade deal championed by Beijing that excludes the U.S. Some analysts said at that time the deal was a “coup” for Beijing.

There’s been renewed optimism that the Biden administration would reengage with the world and the region again. Early signs have indeed pointed to that direction, with Biden beefing up his foreign policy team with experts on Asia.

But Biden would have to find “imaginative” ways to reassert U.S. leadership in the region, said Crabtree.

“The reality is that America’s economic weight is declining, China’s is increasing. And China is also doing a good pretty good job of stealing America’s clothes as the protector of free trade in the region,” he said.

“The big question is: Are they going to go back into the TPP? I think lots of people in Washington think that they should — but the politics is so difficult it’s not clear if they can.”

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