Credit: Original article can be found here
Canberra/Singapore | Members of the trans-Pacific free trade bloc are at odds over how to proceed with China’s membership bid, with Singapore most supportive while Australia and Japan remain unwilling to consider Beijing’s application until it stops using trade as a tool of economic coercion.
While there is agreement that any new member needs to show it will abide by trade rules, some countries are also concerned that if China is allowed to join it will veto any potential application from the United States to rejoin the Comprehensive and Progressive Trans-Pacific Partnership.
Government sources from multiple countries said members for now were delaying any serious consideration of China’s application, as well as the politically sensitive question of Taiwan’s desire to join, by studiously focusing on the completion of the United Kingdom’s membership.
However, the UK’s accession process is taking longer than expected because of market access issues. British officials hope the UK’s improved offer to join the CPTPP will be accepted in coming days when Australia hosts a fresh round of negotiations.
As well as Australia, Japan and Singapore, the other members of the CPTPP are Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru and Vietnam. Expansion requires the unanimous backing of CPTPP members.
Chinese officials have begun canvassing members’ capitals and say they have been received most positively in Singapore, Malaysia and Vietnam.
But Australia and Japan are yet to even open talks with China on its application. Both countries have been victims in the 12 years of China wielding trade as a weapon in political disputes, in Australia’s case bans and punitive tariffs on what was $20 billion of exports, while Beijing blocked exports of critical minerals to Japan in 2010.
While tensions between Canberra and Beijing have eased following Labor’s election win in May, Trade Minister Don Farrell has stuck to the Morrison government’s approach that China needs to drop its trade sanctions.
“To join CPTPP, aspirant economies need to meet CPTPP’s high standards and rules, and have a demonstrated track record of compliance with trade commitments,” he said.
“When it comes to trade, actions speak louder than words.
“Entry to the CPTPP requires a consensus decision by members. The UK accession process is the membership’s priority.”
Chinese officials argue multilateral talks on the trade deal should not be sidelined by the bilateral strains.
Singapore is the current chair of the committee considering new applications. While it is insisting China has to fulfil criteria before it can join, sources said the Singaporeans were most in favour of the economic merits of China’s participation.
Ramp up pressure
One senior diplomatic source said they expected China to pick off the other members in a bid to ramp up pressure on Australia and Japan.
They also expected China to again fight Taiwan’s application, noting that the compromise from two decades ago when China and Taiwan were allowed to join the World Trade Organisation within a day of each other was no longer feasible because the balance had shifted economically and militarily in Beijing’s favour.
Deborah Elms, executive director of the Asian Trade Centre, said there were trade-related concerns about China joining the CPTPP that were shared by various members. For some – notably Australia – there were also obvious geopolitical considerations at play.
“China is already a major trading partner of the CPTPP countries and the further twining together of those economies with China’s is viewed with some concern,” said Dr Elms, who previously led the Temasek Foundation Centre for Trade and Negotiations.
“That is not insurmountable, but it’s definitely a worry in the minds of some.
”And then of course there are specific challenges to do less with economics and more to do with geopolitics and the relationship between China and the CPTPP, and CPTPP members.”
A third challenge for China’s application “is that it is a very large economy and any time you try to bring a large economy into a trading arrangement, that brings risks and opportunities”.
Virtual, as opposed to in-person, meetings have also made it harder for CPTPP members to co-ordinate and make sure they understand each other’s positions on the China application.
“So it’s been difficult to work out what to do,” said Dr Elms.
She added the UK application had given members an out, but now those negotiations were dragging on for longer, some members including Singapore and New Zealand (which will chair the CPTPP Commission next year) wanted action on at least the procedural point in play.
The CPTPP agreement states applications to join should be reviewed in a “reasonable timeline” but doesn’t state what that is.
“The timeline is getting to be problematic for some members. Singapore, which is famously pragmatic, would argue you can’t keep people waiting forever. At the minimum, members should be figuring out how long is reasonable,” Dr Elms said.
As to the merits of China’s application, Singapore would be in the “better in than out” camp, Dr Elms believes. New Zealand would share this view. Dr Elms acknowledged the difficult position Canberra is in but suggested it should adopt the same reasoning.
“I’ve said this to Australia repeatedly; surely it is better for you also to have China embedded in 600 pages of legally binding rules that are accompanied by thousands of country-specific commitments’,” she said.
“Australia has one set of concerns about having China in the CPTPP. Japan, which is still hoping the US will join, has another. But both are going to have to make a decision. They can’t kick this into the long grass forever.”
Australia’s opposition to China in the CPTPP had not been quite as vehement since Labor won government, Dr Elms said.