Speeding up China's Efforts to Join the CPTPP

According to Lu and Zhao, Beijing should step up its lobbying of China-sceptic CPTPP members and its alignment with CPTPP requirements before the UK becomes an official member.

Dear Everyone,

Long before Beijing officially announced its application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in September 2021 and also before Li Keqiang’s unexpected statement a year earlier that “China has a positive and open attitude toward joining the CPTPP”, many Chinese scholars were already advocating that China join this mega free trade agreement (FTA) consisting of Australia, Japan, Singapore, Vietnam, Canada, Chile, Malaysia, Mexico, Peru, Brunei, New Zealand and its soon-to-be new member the United Kingdom.

For instance, in a paper published four years ago, Bai Jie (白洁) and Su Qingyi (苏庆义), two researchers at CASS’s Institute of World Economics and Politics (IWEP), argued that “[China’s] joining the CPTPP would not only have considerable economic significance, but also great political significance.” Beyond the purely economic considerations of joining such a bloc, Bai and Su saw this as a way of “breaking the US’s trade-related ‘regulatory lock’ on China”. They also worried about the possibility of the US one day reviving the Trans-Pacific Partnership (TPP) or simply joining the CPTPP, “placing China in a marginal and passive position in terms of international rule-making.” Moreover, the inevitable reform of the WTO would be significantly influenced by the CPTPP’s provisions, they believed. Joining the CPTPP before this took place would therefore not only allow China to reap what they called “rules dividends” (规则红利) at the economic level, but also have a greater say in the development of rules and standards both within the CPTPP and globally.

And what a coup it would be if Beijing were to somehow meet the requirements of the CPTPP and join this formerly US-led free trade endeavour (Trump withdrew from its earlier version, the more stringent TPP, just after taking office). Beyond the importance for China of deepening its economic interdependence with the world at a time of growing divisions with the West, acceding to the CPTPP would provide Beijing with the perfect symbol to buttress its oft-vaunted pro-globalisation credentials and contrast them with what the Chinese describe as an increasingly inward-looking and protectionist US.

The authors of today’s article, published last month, believe that China’s road to accession will be strewn with hurdles but nevertheless possible. They call on Beijing to speed up both its lobbying of China-sceptic CPTPP members and its alignment with CPTPP provisions before the UK becomes an official member.

Finally, a big thank you to Xiaomeng Sun who helped translate today’s excerpts.

SUMMARY

1. China has a window of opportunity to sway CPTPP members in its favour.

2. Beijing should step up its efforts to convince those most sceptical or undecided about China’s accession: Japan, Canada, Mexico, Australia and Peru.

3. To enhance China's negotiating position, Beijing should show that it is already aligning itself with CPTPP provisions and upholding pledges made under the RCEP.

4. Negotiations should begin before the UK officially joins this regional trade agreement.

First author: Lu Guangsheng (卢光盛)
Position: Director of the Institute of International Relations and director of the Lancang-Mekong Research Centre, Yunnan University.
Other roles: Deputy secretary-general of the China Association of Southeast Asian Studies.
Research focus: International relations of Southeast Asia and China’s periphery (i.e. neighbourhood) diplomacy.
Education: PhD Fudan University (2006)
Experience abroad: Visiting researcher at the National University of Singapore (2010); Visiting scholar at New Zealand’s Victoria University of Wellington (2010); Visiting researcher at Singapore’s S. Rajaratnam School of International Studies (2015).

Second author: Zhao Haotong (赵皓童)
Position: Research assistant at the Lancang-Mekong Research Centre.
Background: Unknown

CPTPP COUNTRIES DIFFER IN THEIR ATTITUDES [TOWARDS US], WHERE SHOULD CHINA GO FROM HERE?
Lu Guangsheng (卢光盛) and Zhao Haotong (赵皓童)
(March 2023)

Introduction

“Against the backdrop of its accession to the RCEP [Regional Comprehensive Economic Partnership], China's proposal to join the CPTPP [Comprehensive and Progressive Agreement for Trans-Pacific Partnership] is of great practical significance for further deepening ‘reform and opening up’ at home, promoting China's alignment with international high-standard trade rules, and boosting economic development in the Asia-Pacific in the post-epidemic era. China applied for membership on 16 September 2021. [However,] CPTPP member countries differ in their attitudes towards China. This article divides their attitudes into [different] categories and provides recommendations for China’s membership application process.”

“At present, the UK will most likely become the first [new] country to join the CPTPP. Member countries intend to make its accession the ‘standard model’ for CPTPP applications. This has important implications for the future success or not of China's accession to the CPTPP. [Given] the different attitudes of CPTPP member states towards China's application and the fact that the application process is based on a one-vote veto system, [under which] all member states must agree before an applicant can join, the question of what measures China should take to gain the support of the eleven member states has become urgent.”

The sceptics and the supporters

“There are 11 CPTPP member countries: Australia, Japan, Canada, New Zealand, Singapore, Vietnam, Mexico, Peru, Chile, Brunei and Malaysia, and their attitudes towards China's membership application can be divided into two categories: supporters and sceptics.”

1. “The supporters: At present, six countries – Singapore, Malaysia, Vietnam, Brunei, Chile and New Zealand - have already explicitly welcomed China's accession to the CPTPP.” [Note: the authors sustain this point with statements of officials from these countries]

2. “The sceptics: Currently, five countries - Japan, Mexico, Canada, Australia and Peru - have doubts about China's accession to the CPTPP.”

“In addition to [Japan’s] Prime Minister, the Japanese Deputy Prime Minister and Finance Minister Taro Aso, [former] Government spokesman and Chief Cabinet Secretary Katsunobu Kato, and [former] Foreign Minister Toshimitsu Motegi have also expressed doubts at a regular press conference as to whether China is in a position to join the CPTPP. However, some within Japanese academia have taken a relatively moderate stance. [Moreover,] a member

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of the Constitutional Democratic Party of Japan and of the country’s House of Representatives wrote an article for The Nikkei entitled, ‘Japan should help push for China’s accession to the CPTPP’ … Although there are shared interests between Japan and the US in the area of security, their economic interests are not always aligned.”

“As for Mexico and Canada, their attitudes are likely to be influenced by the US and the ‘poison pill clause’ contained in the United States-Mexico-Canada Agreement [USMCA]. Although Mexico currently supports China's accession to the CPTPP, it is unclear whether it will change its position in later negotiations due to the constraints of this agreement.”

“Australia has doubts about our country’s ability to meet [the CPTPP’s] high standards in such areas as intellectual property rights, state-owned enterprise reforms and labour rights. [However,] relations between Australia and China are gradually easing … [as seen in] the resumption of high-level dialogue between China and Australia, and also in Australian Prime Minister Albanese's stance on Taiwan's application to join the CPTPP which marks a change from Morrison's hardline attitude towards China under the previous government. [This] has provided favourable conditions for China's application to join the CPTPP.”

“So far, only Peru has not made any statement regarding our country’s membership application.”

“It has now been more than a year since China submitted its application for CPTPP membership. On 27 October 2022, the Ministry of Commerce’s spokesperson, Shu Jueting, stated during a regular press conference that in order to boost the accession process actively, China was following CPTPP accession procedures by engaging, communicating and consulting with members. We shall make the following suggestions with regards to [China’s] CPTPP accession:”

1. “Take the initiative to align [ourselves] with CPTPP rules. At present, there are still obvious gaps between China and CPTPP requirements in many areas. Using CPTPP requirements as a reference, [China should] promote comprehensive domestic reforms and align [itself] seamlessly with international high-standard economic rules. This would help enhance China's bargaining power [将有效提升我国的谈判的砝码]. In the area of trade in services, [China needs to] fill existing gaps by further enhancing marketisation and by lowering market access thresholds. [China should] use a negative list for foreign investment access as the main means to promote greater openness in the investment sector. While ensuring data security, data flows should at the same time be further expanded and the degree of freedom of cross-border data flows increased. In the digital economy sector, the rules of the Digital Economy Partnership Agreement (DEPA) should be used to standardise [current practices in China], master the development rules of today’s global digital economy and accelerate the development of this sector in China.”

2. “Choose the right moment to carry out negotiations with regards to our application. The current international environment is generally conducive to our beginning CPTPP negotiations. This is because New Zealand, which holds the rotating chair of the CPTPP in 2023 after Singapore in 2022, has a relatively important say [有较大话语权] in the admission of new members. Both countries have welcomed our membership application. This will have a positive effect on our accession negotiations and will be conducive to our launching these. In addition, as the negotiation process for the UK's accession to the CPTPP moves steadily along, China should do its best to start [its own membership] negotiations before the UK formally becomes a member so as to avoid potential ‘uncertainties’ [潜在的不确定性] from the UK.”

3. “Seek support from more member countries. Among the five sceptical countries – Japan, Mexico, Canada, Australia and Peru – China should negotiate actively with Mexico and Peru. While ensuring that Mexico will not be influenced by the United States to change its attitude [towards us] in the future, we should also encourage Peru to change its sceptical attitude to a supportive one, thus increasing the likelihood of success in our [overall] negotiations. Although Japan, Canada and Australia have expressed doubts about our membership application, a successful outcome of these negotiations is not completely impossible. This is because as core CPTPP members, these three countries are well aware that, given the market size and economic weight of existing members, a CPTPP without the US will find it difficult to achieve the partnership’s expected goals such as boosting trade, investment and economic growth in the Asia-Pacific if China is not admitted to join.”

4. “Seize the strategic opportunity presented by the RCEP's [recent] entry into force and use the RCEP to stimulate [促动] the negotiation process of the CPTPP. The RCEP and the CPTPP have seven overlapping member states. Although the RCEP, as the world's largest free trade area, has certain differences [一定差距] with the CPTPP in some areas, the two should be complementary and mutually reinforcing. The coordination and interaction between the RCEP and the CPTPP is of great value in promoting the establishment of an Asia-Pacific free trade area. In future, China should further lower [market] access thresholds in areas such as trade in goods and services, finance and investments, and cross-border data flows; grant differential treatment to the least developed countries [LDCs]; provide technical assistance and support for infrastructure development; ensure that these LDCs maximise the development dividends brought about by RCEP; and promote a more open, inclusive and mutually supportive trade and economic environment in the Asia-Pacific region.”

   “In addition, China's ability to fully implement the RCEP’s rules will become an important criterion for CPTPP member countries when assessing China's membership application. Following the coming into force of the RCEP, attention should be focused on China’s binding obligations under the RCEP and on implementing its rules fully so as both to allay CPTPP member countries’ concerns about China’s [ability to implement the CPTPP’s own] rules and further enhance the possibility of China's smooth accession to the CPTPP.”

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1. His or her Chinese name is given as “太荣治”.