ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter
Trade

China's CPTPP bid greeted with skepticism and caution

US allies express doubts over Beijing's willingness to reform economy

Then-U.K. Trade Secretary Liz Truss, now foreign secretary, chairs a CPTPP roundtable in London on July 10, 2020. (Photo courtesy of No. 10 Downing Street)

TOKYO/BEIJING/WASHINGTON -- Japan and Australia on Friday joined a chorus of U.S. allies that have aired caution and trepidation over China's bid to join an 11-nation trans-Pacific trade group, skeptical that the world's second-largest economy is willing to conform to the pact's high standards for free trade.

There is also concern that even if China did join, it would bend the rules of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) to favor its own interests.

"We need to determine whether [China] is prepared to fulfill the high standards" required by the trade pact, said Japan's Minister of Economy, Trade and Industry Hiroshi Kajiyama, echoing the sentiment of other top government officials in Tokyo, a member of the CPTPP. Beijing's willingness to compromise on issues like subsidies to state-owned companies was particularly questioned.

Fellow member Australia also expressed skepticism. When Australia called for an independent investigation into the origin of the coronavirus pandemic, China retaliated by slapping stiff tariffs on Australian barley and wine and placing ceilings on some of its imports on meat and coal.

"As we have conveyed to China, these are important matters which require ministerial engagement," said Australian Trade Minister Dan Tehan, hinting that Canberra would not support the start of negotiations unless the China's trade restrictions are resolved.

The possibility of Chinese membership also raised concern that Beijing would use the size of its market to get its own way on issues. 

Few analysts believe that China will be accepted into the CPTPP, but rather see Beijing's application as taking advantage of the gap created by U.S. reluctance to join any new free trade agreement. 

"We need to oppose actions that use the name of so-called rules to undermine the international order and cause confrontation and division," Chinese President Xi Jinping said in a speech Friday, in a thinly veiled rebuke against the U.S. and its allies.

Japan and the U.S. originally led the formation of the trade deal as an economic counterweight against China in the Indo-Pacific region. But in 2017, then-U.S. President Donald Trump withdrew from the agreement in one of his first acts in office.

Despite having bowed out of the treaty, the U.S. weighed in on China's bid for membership.

"We would expect that China's nonmarket trade practices and China's use of economic coercion against other countries would factor into "the decision of whether to include Beijing to the CPTPP," a U.S. State Department spokesperson said Thursday in a statement.

The Japanese government sees the return of the U.S. to the CPTPP as the best approach to counter China, but opposition to the trade deal remains strong in the U.S.

Beijing's application to join the pact appears to go beyond trade alone. Taiwan, which has become a focal point for security versus China, has expressed interest in joining the CPTPP. The European Union announced Thursday an Indo-Pacific strategy geared toward strengthening relations with Taiwan. While the day before, the U.S., the U.K. and Australia created a new security cooperation framework that has an eye on China.

Japan is in the middle of a race to replace outgoing Prime Minister Yoshihide Suga as leader of Japan's ruling Liberal Democratic Party, and all four candidates addressed China's CPTPP application with caution.

Taro Kono, who polls as the most popular candidate, was cool toward the idea of admission. 

"China cannot fulfill the requirements for TPP membership today given the various trade rules currently in place in that country," he said on TV Tokyo program on Friday.

Sanae Takaichi, the most hawkish candidate, said, "Because there are other relevant countries, we need to discuss this," at a joint news conference.

But Seiko Noda who jumped in the race at the last minute struck a more conciliatory note. The level of China's willingness to engage should be determined and its membership "considered positively because of the stability it would give the global economy," she said.

The 11 members of the CPTPP account for over 10% of the global gross domestic product. Adding China would push the ratio up to 30%. Other CPTPP members include Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. The U.K. is in negotiations to the pact as well.

Additional reporting by Yusuke Takeuchi in Tokyo

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends October 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more