The coffee is good in Vietnam. Much better than the rubbish that is served up across the United States. Coffee is just one of the things Vietnam does better than its former enemy.
Over an espresso in Ho Chi Minh City this morning I saw another thing the Vietnamese seem to do better than the Americans. Geopolitical economic analysis.
We are only a few sleeps away from ‘cousin Donald’ (he is my fifth cousin once removed – which is not enough removal for my liking) becoming the second-most powerful man in the world.
While America is still more powerful than China, Chinese President Xi Jinping has more oomph in his system than the Donald has in the US. Xi is arguably more powerful overall and if he is not yet, he soon will be. Economics dictates this reality.
The Vietnamese can see this, even if the Americans cannot.
Over the coffee I read the morning edition of the Vietnam News. The paper’s excellent analysis of the ramifications of Mr Trump and Hillary Clinton both calling for an end to the Trans-Pacific Partnership (TPP) described how shortsighted US politics has become and shows how economic leadership in the Pacific has been gifted by the Americans to the Chinese.
The TPP is more than just a painstakingly negotiated free trade agreement to include most Pacific countries including Vietnam, Australia, Peru and many more, led by the US but excluding China. In geopolitical terms it was the US’s way of maintaining long-term economic and political leadership, not just trade.
China countered by offering the RCEP – the Regional Comprehensive Economic Partnership – which is a free trade agreement in the Pacific including Japan, Australia, Peru, Chile and stretching all the way to India. It is led by China and excludes the US.
Even without the Americans, the RCEP has the potential to be the world’s largest free trade block covering up to 50 per cent of global GDP.
The TPP and the RCEP were China and the USA’s way of saying to the Pacific economic world ‘pick a side’. But even China recognised it was playing a long game designed to wrestle economic leadership from the Americans down the track with the US likely to win round one and get the TPP into being first.
Then came cousin Donald’s populist revolution calling on the TPP to be scrapped because it was a “bad deal, the worst deal” and would allow China to steal US jobs.
Mr Trump conveniently forgot the fact that the TPP excludes China.
Mrs Clinton, you may have hoped, would have used her extensive international experience to point out that China couldn’t pinch jobs from an agreement it is not a party too. You’d think that perhaps she would point to the large geopolitical issues and talk about the TPP as an economic coalition against Chinese dominance.
But no. Mrs Clinton followed Mr Trump down the populist line and lost.
With both Mrs Clinton and Mr Trump calling for the TPP to be scrapped, President Barack Obama signalled that the agreement would not go to the lame duck session of congress. In response, Asia Pacific leaders at their APEC meeting before Christmas almost universally said that without TPP, they (including Japan and Australia) would go to the RCEP.
China is now looking like the cat that got the cream. It seems it will win leadership probably a decade earlier than even they would have thought – unless something urgently changes in Washington.
One hopes that if the journalists in the Vietnamese newspapers can see the massive geopolitical shift that scrapping the TPP will cause, perhaps the US will change its tone?
The TPP/RCEP battle isn’t the only economic story going under the radar.
Back in November, The New Daily covered the massive changes going on in central Asia as China’s ‘One Road One Belt’ policy unfolds.
If China achieves both the RCEP and One Road One Belt, they have locked up the economic world save for a stagnating Europe, the east coast of South America and the US. Cancelling the TPP is the greatest shot in the foot that the US could do.
Mr Trump has a handful of days left before he becomes president to find a way out of his promise to “tear up TPP on day one”, otherwise his presidency will see the world change further and faster against the US interests than anyone could imagine.
Far from ‘Making America Great Again’, cousin Donald is heading down the path of Making the US Grate Again.
Andrew Macleod is a former senior official of both the United Nations and the International Committee of the Red Cross and past CEO of the Committee for Melbourne. He is the author of A Life Half Lived by New Holland Press.