China’s offer to join the CPTPP, analysts on strategic competition with the United States

Chinese President Xi Jinping on January 0, 2015. China has applied to join the 11-nation trade agreement CPTP formed in 2018 after the United States withdrew from the Trans-Pacific Partnership.

Fred Dufour | AFP | Getty Images

China is likely to fail to join the Comprehensive and Progressive Trans-Pacific Partnership কিন্তু but the move to submit an application highlights the lack of U.S. economic policy in the Asia-Pacific region.

The CPTPP is an 11-nation mega trade deal that was formed in 2018 after Donald Trump pulled the United States out of the Trans-Pacific Partnership a year ago.

President Barack Obama discussed the TPP to deepen U.S. economic engagement in the Asia-Pacific region and address China’s growing influence in the region.

The 11 signatories to the CPTPP must agree to China’s request to join before being admitted as a member. The CPTPP countries are: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

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Analysts say Beijing’s diplomatic relations with some member states will undermine its potential. They added that China would probably face difficulties in meeting the demands of trade agreements for equivalent areas in many areas of the economy.

China is not the only applicant to join the CPTPP; The United Kingdom and Taiwan have done the same.

US allies in the CPTPP

U.S. allies in the CPTPP, such as Australia, Canada and Japan, increasingly see China as a “strategic threat” and could block China’s appeal, say analysts at risk adviser Eurasia Group.

Analysts say “Beijing will have to make big concessions on a number of issues in order to rebuild goodwill with them. The consent of the three countries is questionable as there has been no significant change in Chinese policy.”

One of Japan’s next prime ministerial rivals has reportedly questioned China’s ability to meet CPTPP standards. Australian Commerce Minister Dan Tehan also stressed in a speech on Wednesday that any country wishing to join the trade agreement “must abide by all rules and standards.”

Japan has an existing regional dispute with China in the East China Sea, while Australia is in the final stages of accepting import tariffs imposed by China.

Meanwhile, Canada and Mexico could stand in the way of China through the United States-Mexico-Canada Agreement or USMCA. The trade agreement contains a “poison pill” provision so that any one of the three members can consult with the others if it wants to enter into a trade agreement with a “non-market country”.

Many analysts say the trend could be aimed at China. The USMCA was negotiated by the Trump administration and replaced the North American Free Trade Agreement, or NAFTA.

Meet CPTPP standards

China can without political obstacles Analysts say CPTPP provisions imposing restrictions on state-owned companies, as well as border data flow, labor and environmental protection, are difficult to meet.

Businesses in the United States and the European Union have accused China of unfair trade practices, such as subsidizing state-owned enterprises, lacking protection of intellectual property, and forcible transfer of technology.

For its entry into the trade agreement, China must comply with the rules of state agencies and labor and environmental regulations, which will be a major departure from its current position.

“For its entry into the trade agreement, China must comply with the rules of state agencies and labor and environmental regulations, which would be a major departure from its current position,” economists at Consulting Capital Economics wrote in a report.

They added, “It is difficult to see how the pressure of self-sufficiency can be eliminated with the demands of the CPTPP’s level playing field.”

Others Trade experts say it will not be difficult for China to meet the requirements of the mega trade agreement.

Because CPTPP is less ambitious than its predecessor TPP and has Stephen Olson, a senior research fellow at the Heinrich Foundation, said there were “significant exceptions and wide gaps” that would help China comply with more challenging provisions.

“And in cases where defined exceptions are inadequate, China has already demonstrated its enormous efficiency in bending, avoiding and otherwise repealing trade rules in other agreements,” Olsen said.

‘Smart diplomacy’

Regardless of its success, analysts say China’s CPTPP bid highlights the country’s expanded economic influence in the Asia-Pacific region, while the United States has focused primarily on security issues in the region.

This is especially so when China’s application follows the formation of a new security partnership between Australia, the United Kingdom and the United States – called AUKUS, analysts said.

Analysts at Eurasia Group said the move was a “smart diplomacy” after the announcement of the UQS Security Partnership, as it focuses on trade and investment in the Asia-Pacific region, where the United States has made little progress in tackling China’s economic pressures.

Unfortunately, one thing that is clear is that the United States has reacted rather than led again and is therefore allowing China to determine the course of events in Asia.

William Reinshaw

Center for Strategic and International Studies

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