Beijing submits application to join CPTPP . . .
On Thursday, China formally applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Buzz about China’s interest began in early spring, shortly after Britain submitted its application. Beijing’s CPTPP move comes at a moment of considerable churn in international politics. Last week, Australia, the U.S., and the U.K. announced a new military agreement (Aukus), and the EU launched its Indo-Pacific Strategy, which includes moving closer to Taiwan, an economy that has also expressed interest in joining the CPTPP. Meanwhile, Japan is in a leadership race for its next prime minister, and Canada just wrapped up its federal election. The CPTPP came into force in 2018 for Australia, Canada, Japan, Mexico, New Zealand, Peru, Singapore, and Vietnam. Members Brunei, Chile, and Malaysia have not yet ratified.
Hold your horses . . .
China has been on a trade and investment roll in its decades-long quest to participate in and shape international organizations. Its CPTPP application comes on the heels of concluding the Regional and Comprehensive Economic Partnership Agreement (RCEP) with 14 other Asia Pacific members in November and the Comprehensive Agreement on Investment with the EU in December. However, applying to the CPTPP should not be conflated with accession, for which there is a detailed five-step process. China could face years of hiccups trying to prove that its laws, regulations, and practices meet the pact’s standards. To further complicate the matter, the non-market country clause in the Canada-US-Mexico Agreement (NAFTA 2.0) has stipulations around its members negotiating and signing free-trade agreements with non-market countries. If any CUSMA member moves forward without the support of the others CUSMA could be terminated.
Fuel for the fire . . .
China’s CPTPP move may be mostly about satisfying domestic political needs, such as showing the Chinese public that some trade blocs are designed to exclude China and/or a way to signal to domestic audiences that it plans to introduce more changes to regulations. Regardless, the international community has begun to weigh in. Japan and the U.S. (which is not a member of the CPTPP) have expressed doubt that China could meet the CPTPP’s standards, especially its rules around government support for state-owned enterprises, non-market trade practices, and economic coercion. Australia said it would not support negotiations until its trade issues with China are resolved. Malaysia, which has not yet ratified the CPTPP, is one member country that has voiced its support for China’s application.