China is increasing its efforts to join a major trade deal that originally aimed to exclude it and cement US economic power and trade ties in the Asia-Pacific region.
Officials from Australia, Malaysia, New Zealand and possibly other nations have held technical talks with Chinese counterparts on details of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP).
China announced in February it had held informal talks with some of the members, but didn’t release details. It’s not clear how far China has progressed in preparing an application, but the experts see Beijing as seriously interested in joining, with multiple officials pointing to comments last year from President Xi Jinping as an indication of intent.
The Trans-Pacific Partnership (TPP) was envisioned by the US as an economic bloc to balance China’s growing power, with then-President Barack Obama saying in 2016 that the US, not China, should write the regional rules of trade. His successor Donald Trump pulled out of the deal in 2017, with Japan leading the revised and renamed pact to a successful conclusion the following year.
Heavy dependence on China
Many of the CPTPP nations are heavily dependent on trade with China, but China’s increasingly poor image in some nations may make it harder to agree on entry. Concerns over labor practices, state-owned companies and its economic confrontation with America also loom as potential roadblocks for entry.
If it does join, China would become the largest economy in the partnership and further cement its position at the center of trade and investment in the region. Beijing already helped lead a separate regional trade deal known as RCEP to a successful conclusion last year, but joining the CPTPP would require it to make additional concessions and gain the agreement of all 11 members including Australia, Canada and Japan, US allies with which it has increasingly difficult relations.
Joining the CPTPP requires the consent of current members, who say there won’t be any concessions for new members. According to an official from one member country, the deal isn’t an a la carte menu from which China can pick and choose, but a full-course meal that the 11 members have prepared together. Even if China can delay parts of the menu, ultimately it must eat the whole meal, the official said.
However Japan, currently the largest economy in the deal and this year’s CPTPP chair, appears to have little appetite for a swift Chinese push to join. Before it considers a potential Chinese application, Japan believes talks should be concluded on a trilateral free-trade deal with South Korea and China that builds on the Regional Comprehensive Economic Partnership, according to two officials.
Those trilateral talks haven’t made much progress in recent years amid historical disputes between Japan and South Korea. In addition, Japan wants to see how China implements its promises under RCEP before looking at any new trade deals, according to a senior official with knowledge of Tokyo’s position.
A further complication is Taiwan, which says it has held talks with all the CPTPP members and will officially apply when the timing and conditions are right. Taiwanese Foreign Minister Joseph Wu said last month that he hoped China’s efforts to join the deal wouldn’t prevent Taiwan from joining too.
China opposes Taiwanese participation in any international organization or agreement. Taiwan is also trying to advance trade deals with the US and Japan, which could affect attitudes toward the CPTPP.
Even though the US isn’t a member of the deal, its position will be a key factor in any Chinese application. Many CPTPP members are allies or friends of the US and still hope it will return to the deal eventually. They may decide to delay a decision on China to see if the US changes course again under the Biden administration.