WASHINGTON (AFP) — The United States is becoming increasingly protectionist and risks losing its economic leadership position in Asia to China, an official of President George W. Bush's administration warned on Monday.
"It is ironic that in the 21st century, America is turning inward, uncertain whether economic engagement with Asia is in the national interest -- even as Asian nations rush to conclude trade and investment agreements with one another," said Commerce under secretary Christopher Padilla.
"Perhaps this seems alarmist. But look at the facts," he told a Washington forum, saying many US lawmakers "are deeply suspicious" of expanded trade with allies such as South Korea and "downright hostile" toward trade with China.
The Democratic party-controlled US Congress has refused to ratify a free trade agreement with South Korea, the biggest trade deal in 15 years, citing barriers restricting US auto imports among the key reasons.
Lawmakers are also considering plans to impose sanctions on China over currency concerns, amid recent turmoil in the American economy following a housing market crisis, falling US dollar and record oil prices.
Padilla said he wondered whether America would remain committed to economic openness.
If Washington drifted toward trade protectionism and restrictive investment and immigration policies, then Asia was likely to proceed on its own with regional integration, leaving the United States behind, he said.
This would leave leadership on the Asian economic playing field largely to China, the fastest-growing Asian economy, he said.
"A hesitant, timid, and inwardly focused America could give rise to an economic 'Pax Sinica,' in which China has the opportunity to shape Asia's economic architecture as it would prefer, rather than as we might like," he said.
"Others in Asia might have little choice but to accommodate themselves to this economic reality," he said.
Pax Sinica, Latin for 'Chinese Peace,' is a euphemism for periods of peace in East Asia during times of a strong Chinese empire between the 1680s to 1790s, characterized by the dominance of the Chinese civilization.
China is again gaining influence in the region, striking trade and investment deals with countries amid rapid economic growth and on the back of a defense buildup and foreign exchange holdings.
The Bush administration has been striving to create what it calls building blocks of an Asian economic architecture that includes the United States.
It has signed free trade agreements with Singapore, Australia and South Korea, and launched negotiations for similar pacts with Thailand and Malaysia.
It recently announced that it would begin work on services and investment with a budding Asia-Pacific grouping called the Trans-Pacific Strategic Economic Partnership Agreement, or "P4," involving Singapore, Chile, New Zealand and Brunei.
The United States also launched talks last month to frame bilateral investment treaties with China and Vietnam.
Padilla said that the hesitancy of Congress to ratify the free trade agreement with South Korea had created uncertainty among Asian partners about America's economic commitment to its closest regional allies.
"Meanwhile, China's economic footprint continues to grow, and its economic diplomacy grows more assertive. The window for US economic leadership in the Pacific is closing," he said.
If the Korean deal fails to pass Congress, Padilla said, the cost to US economy would go far beyond lost trade opportunities in that Asian nation.
"America would be ceding economic leadership in Asia, increasing the likelihood that a future Asian economic architecture will leave out the United States," he warned.
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