SINGAPORE -- The Malaysian government says it "looks forward to welcoming" China's entry into the 11-nation Trans-Pacific Partnership trade pact, throwing its support behind a bid that has drawn mixed reactions among fellow founding members.
Malaysia's Ministry of International Trade and Industry is "particularly encouraged with the recent move" by China to apply to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, according to a statement Nikkei obtained Sunday. The ministry sees China entering the agreement "possibly as early as next year."
Malaysia's trade ministry "is confident that bilateral trade and investment ties between Malaysia and [the] PRC will grow to greater heights," according to the statement, which used the abbreviation for the People's Republic of China.
China, which officially applied to join the pact last Thursday, is Malaysia's largest trading partner in terms of exports and imports. Malaysia has signed on to the CPTPP and the ratification process could wrap up within the year.
With the Association of Southeast Asian Nations close to China geographically and sharing close economic ties with the Asian power, CPTPP members in the bloc have exhibited little resistance to China joining. Singaporean Foreign Minister Vivian Balakrishnan said during Chinese Foreign Minister Wang Yi's visit to the city-state last Monday that he welcomed China's consideration of joining the pact.
Representatives of the Trans-Pacific Partnership trade deal after the signing ceremony in Santiago, Chile, in March 2018.
© Reuters
As members of the Regional Comprehensive Economic Partnership, a rival regional trade bloc, both ASEAN and China look to launch the RCEP at an early date.
Meanwhile, CPTPP member Japan is wary of the prospect of China taking a leading role in shaping Asian trade. Tokyo says it will closely assess whether China is ready to meet the high levels of compliance required by the Pacific trade deal.
Australia, another CPTPP member, has indicated it will not support China's entry into the agreement unless bilateral trade frictions are resolved. As China needs the support of all members to join the group, Japan or Australia could effectively block its entry.
Fellow member Mexico has also taken a cautious stance, with the economy ministry releasing a statement Monday that the pact is open to countries that meet its high standards. This was seen as a veiled reference to the challenges China may face with its economic rules, including subsidies for state-owned businesses.
Yet Malaysia and Singapore are seeking to form stronger ties with China through multilateral trade agreements, as well as with other economic powers such as Japan and the U.S.
"Many will suggest that keeping China constrained by a set of rules that are consistent is better than trying to compete with China operating outside of the same rulebook," said Deborah Elms, executive director of Asian Trade Center, an advocacy group.
If China commits to internal reforms to fulfill CPTPP requirements, other members of the agreement could become more receptive to Beijing's entry. In that scenario, Japan would need a more convincing argument to lobby members against China's accession.
During his trip to Singapore, Yi expressed interest in the Digital Economy Partnership Agreement, a pact formed last year by Singapore, New Zealand and Chile -- initiators of the original TPP. The DEPA aims to create standard rules concerning advanced technology and the cross-border transfer of big data.
If Beijing decides to join DEPA ahead of Japan or the U.S., China's footprint in Asian multilateral trade agreements would expand further.
CPTPP members also include Brunei, Vietnam, Canada, Australia and Peru.
Additional reporting by Hidetake Miyamoto in Mexico City.
