Comprehensive and progressive agreement for Trans-Pacific Partnership Updates
Sign up for MyFT Daily Digest first to learn about the Comprehensive and Progressive Agreement for Trans-Pacific Partnership news.
Just a week after China submitted its own membership tender, Taiwan applied to join a major transatlantic trade deal, forcing the two rivals to run against each other.
Taiwan’s formal request to join the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP) will force the other members of the treaty into a fine political balance law.
An official from Taiwan’s presidential office told the Financial Times on Wednesday: “We have submitted a formal application this afternoon.
A senior Taiwanese trade policy official confirmed that the application had been sent to the New Zealand Ministry of Foreign Affairs and Trade, which handles CPTPP membership requests. A spokesman for the ministry said the request would be shared with other signatories to the trade agreement before deciding “whether to start the accession process”.
Almost simultaneous requests from China and Taiwan create more competition between the two during high tensions. Beijing claims Taiwan as part of its territory and threatens to invade if Taiwan rejects unification indefinitely.
The Chinese government often helps third countries as well as international organizations, non-governmental organizations and commercial enterprises to isolate Taipei and deny it its own rights in the international arena.
Trade experts in Taiwan and Japan say that although both China and Taiwan’s membership in the World Trade Organization was a precedent for both countries to participate in a trade agreement, Beijing’s power and political will are now much higher, making a CPTPP agreement politically more complex for both.
In 2001 and 2002, China and Taiwan joined the WTO within a month of each other.
In recent years, China has often used its economic power to make “unpopular” political decisions to other countries, including Australia and South Korea, by imposing sudden bans on some imports from those countries or suspending Chinese tourism.
Joining the CPTPP from Beijing and Taipei will raise concerns among trade group members that China’s refusal to join quickly or its decision to allow Taiwan in the first place could create more economic pressure from Beijing.
The CPTPP was originally designed by the US to limit Beijing’s growing influence in the region, and was revived at the initiative of Japan after the US was ousted. Under its rules all existing members have vetoes on new members.
Prior to Taiwan’s appeal, Charles Finney, a former New Zealand diplomat and trade negotiator, hoped that Beijing’s sudden move to join the CPTPP would probably motivate Taipei to take action.
“Taiwan must become a member of China sooner or later. I don’t see Taiwanese taking the risk that China will be in a position to veto any application from Taiwan, “said Finney, who has signed free trade agreements with both Beijing and Taipei.
Trade experts have previously noted that Taiwan has shown that it meets the required standards through its free trade agreements with Singapore and New Zealand, which are founding members of the CPTPP.
Taiwan has wanted to join the CPTPP for many years, and has completed the necessary legal preparations to deregulate the country’s markets to meet contract standards. However, Taipei was taking time off with the formal application because it did not end informal consultations with club members.
Japan, which holds the rotating chairmanship of the CPTPP, is urging Taipei to conclude its preparatory talks and apply for the chairmanship before leaving for Singapore in January.
A Japanese diplomat involved in the issue told the FT this month that Tokyo feared that Taipei would lose any opportunity to join the regional trade group if China became a member.
China’s official move to join the CPTPP last week surprised its members and Taiwan. Although Beijing had previously publicly expressed interest in joining the trade club and had begun lobbying for the support of some members over the past two months, it did not conduct detailed consultations.
The influential role of state-owned enterprises in China’s economy, in particular, is seen as a barrier to the country’s accession to the CPTPP.
The New Zealand Ministry of Foreign Affairs and Trade did not immediately respond to a request for comment.
The Taiwanese government is expected to announce its move on Wednesday, after it notified 11 CPTPP members of its application.
Additional report by Kana Inagaki in Tokyo
The FT has redefined Trade Secrets, a must-read daily briefing on the changing face of international trade and globalization.
Sign up here to understand which countries, companies and technologies are shaping the new global economy.