Pompeo Knocks China in Pitching U.S. Interests in Southeast Asia

(Bloomberg) -- Secretary of State Michael Pompeo took not-so-subtle digs at China in pitching U.S. commitment to a “free and open” Indo-Pacific region despite President Donald Trump’s decision last year to pull out of the Trans-Pacific Partnership trade agreement.

Pompeo, speaking Monday at the U.S. Chamber of Commerce before a trip to Asia, said the U.S. believes in “strategic partnerships, not strategic dependency,” a veiled criticism of China’s efforts to woo countries with cheap financing for infrastructure projects and its Belt and Road Initiative, a project aimed at forging new economic ties with Europe, Asia and Africa.

“With American companies, citizens around the world know that what you see is what you get: honest contracts, honest terms and no need for off-the-books nonsense,” Pompeo said. Another advantage of the U.S., he said, is that “we will help them keep their people free from coercion or great power domination.”

Pompeo’s speech comes as the U.S. and China find themselves in an escalating trade war that economists warn could undermine global growth. The Trump administration is giving the public until Tuesday to comment on its plan to impose tariffs on a further $16 billion in Chinese imports. U.S. Trade Representative Robert Lighthizer said last week that tensions with China are a “chronic problem” that could take years to resolve.

The secretary of state conceded that some nations may doubt U.S. commitments to the region after Trump quit talks over the Trans-Pacific Partnership. Pompeo said the U.S. is working to build “higher-standard” bilateral trade deals, though many Asia analysts and even House Speaker Paul Ryan say the U.S. decision was a mistake, partly because the TPP was intended as a counterbalance to China.

After the U.S. withdrawal, trade ministers from the 11 nations that stuck with TPP talks -- Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam -- signed a new agreement in Chile on March 8.

The new accord expands free-trade rules beyond agriculture and services, embracing the digital economy and adopting stronger protections for intellectual property. Unlike a traditional trade deal that merely covers the exchange of goods and services, there are broader requirements in areas such as labor issues, the environment and government procurement.

Bilateral Trade Deals

Pompeo’s speech didn’t suggest any change in the U.S. stance toward the agreement.

“While we work with our partners to craft better and higher-standard bilateral trade agreements, our companies are continuing to advance U.S. economic interests by growing their presence in the region,” Pompeo said.

Separately, one of Japan’s top policy makers indicated the government will resist U.S. efforts to create a bilateral free trade agreement between the two nations, saying it should return to the TPP instead.

Trump addressed the issue on Twitter in April, writing, “While Japan and South Korea would like us to go back into TPP, I don’t like the deal for the United States. Too many contingencies and no way to get out if it doesn’t work. Bilateral deals are far more efficient, profitable and better for OUR workers. Look how bad WTO is to U.S.”

Pompeo delivered the speech as he prepares to travel to Malaysia, Singapore and Indonesia from Aug. 1-5 for a meeting of foreign ministers of the Association of Southeast Asian Nations. The top U.S. diplomat will also be seeking to ensure that countries remain committed to maintaining economic sanctions on North Korea.

©2018 Bloomberg L.P.