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Xi Jinping and China forced Tsai Ing-wen and Taiwan to play catch-up with a sooner-than-expected application to join a trade bloc currently being presided over by Japan. (Nikkei montage/AP/Wataru Ito/Presidential Office of Taiwan)
China up close

Analysis: China and Taiwan bids catch CPTPP chair Japan off guard

Distracted by race to replace prime minister, Tokyo took its eye off the ball

KATSUJI NAKAZAWA, Nikkei senior staff writer | China

Katsuji Nakazawa is a Tokyo-based senior staff writer and editorial writer at Nikkei. He spent seven years in China as a correspondent and later as China bureau chief. He was the 2014 recipient of the Vaughn-Ueda International Journalist prize.

TOKYO -- After Taiwan's main opposition KMT party elected Eric Chu as its new leader, Xi Jinping, in his capacity as general secretary of the Chinese Communist Party, sent a congratulatory message calling for the two parties to work together to achieve national reunification and "the great rejuvenation of the Chinese nation."

The Chinese president emphasized the importance of opposing Taiwan independence. Based on that "common political foundation," the two parties, over the years, have engaged in positive interactions, Xi said.

Xi did not send congratulatory messages when Tsai Ing-wen of the pro-independence Democratic Progressive Party won Taiwan's last two presidential elections, nor when Chu's predecessor was elected as chairman of the KMT, properly known as the Kuomintang.

The exchange of messages came shortly after China and Taiwan, within a week of each other, applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, formerly known as the TPP.

Suddenly, the waves in the Taiwan Strait look higher.

Upon being elected Kuomintang chairman, Eric Chu received a message from Xi Jinping, who wants the KMT and CCP to work together toward "the great rejuvenation of the Chinese nation."   © EPA/Jiji

The political storm has hit Japan in the face. As the largest economy in the CPTPP, the bloc's 10 other members are looking to Tokyo for leadership. Japan will have to play referee in this tug of war between Beijing and Taipei.

This year, Japan serves as chair of the cabinet-level CPTPP Commission, the bloc's highest decision-making body, making it all the more imperative that it does take the lead.

The problem is that Japan was not prepared. After Prime Minister Yoshihide Suga in September made the bombshell announcement that he would not seek to be reelected as the ruling Liberal Democratic Party's president, thus confirming that he would step down as prime minister, all eyes in Japan turned inward. Little attention was paid to external policies.

Japan also did not expect China to formally apply for CPTPP membership while Tokyo was the chair of the bloc's commission, a period that runs through the end of this year.

While Xi made clear his intent in November 2020 that China would "favorably consider" joining the CPTPP, Japan had thought such a move would come after next year, after Singapore assumes the chair.

"There is proof that Japan was careless," a source familiar with CPTPP negotiations said, pointing to a joint ministerial statement issued after a CPTPP Commission meeting on Sept. 1.

At the end of the statement are these words: "The next CPTPP Commission meeting will be hosted by Singapore in 2022."

Fumio Kishida, right, celebrates with outgoing Japanese Prime Minister Yoshihide Suga after being announced the winner of the ruling party's presidential election in Tokyo on Sept. 29. (Photo by Koji Uema)

They were music to China's ears.

Here was Japan all but admitting that its stint as chair had concluded. Tokyo had considered the U.K.'s application as its main task during its chairmanship. It is clear that Japan failed to detect any sign of China's moves.

As discussed in this column last week, China had a "300-day plan" to apply for CPTPP membership, trying to preempt U.S. President Joe Biden's possible return to the trade bloc.

Upon seeing Japan's statement, Chinese Foreign Minister Wang Yi headed immediately to Singapore, the 2022 commission chair.

After completing all necessary behind-the-scenes maneuvers, China formally filed a TPP membership application with New Zealand, the depositary for the trade pact. Japan was circumvented. Call it "Japan passing."

The U.S. and Taiwan were also caught off guard.

The Biden administration was busy creating AUKUS, the new security cooperation framework with the U.K. and Australia. The CPTPP was not on its radar.

Taiwan, for its part, had shown interest in joining the CPTPP and had already completed its homework. With all legal issues addressed, it came down to when, not if, the self-ruled island should officially apply. China's unexpectedly early application rushed Taiwan to follow suit.

Any decisions on how to deal with China's and Taiwan's applications will not be made easily. Unanimous consent is needed to kick off negotiations with a potential new member and again to accept a new member.

Chinese Foreign Minister Wang Yi meets with Singaporean Prime Minister Lee Hsien Loong at The Istana in Singapore on Sept. 14.   © Ministry of Communications and Information Singapore/Reuters

Each CPTPP member has different relations with China and Taiwan. But Japan, as this year's chair, has a responsibility to lead these difficult discussions toward the future.

It is desirable, therefore, for Japan to hold another meeting of the CPTPP Commission by the end of the year to gauge opinion and to come up with a united position for the TPP-11 countries.

If the scourge of the novel coronavirus subsides and a state of emergency is lifted in Japan, it could be this year's first in-person CPTPP Commission meeting. Japan should not give up due to domestic politics, regardless of the leadership change, and it is too early to call it quits. There is plenty of time before the end of the year.

It will be important for Japan to come up with a logic that does not allow China and Taiwan to bring their political baggage into the CPTPP.

To be sure, the precursor TPP was a framework created with an eye on China. But fairness is required of a chair presiding over discussions.

One guiding principle should be strict adherence to the CPTPP's high standards. Only applicants that can meet such standards will see the door opened for membership negotiations and actual accession.

In response to a question about Taiwan's CPTPP membership bid, Chinese Foreign Ministry spokesperson Zhao Lijian told reporters, "There is only one China in the world, and the Taiwan region is an inalienable part of China's territory.

"China firmly opposes all official interactions between Taiwan and any country, firmly rejects Taiwan's accession to any agreement or organization of official nature. China's position on this issue is clear."

But China and Taiwan are both members of the World Trade Organization. Taiwan's official title at the Geneva-based trade watchdog is "the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu."

For the CPTPP, Taiwan also applied as the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu.

Unlike her Kuomintang rival, Tsai Ing-wen received no congratulatory message from Xi Jinping upon her latest electoral victory. (Photo by Akira Kodaka) 

President Tsai tweeted in Japanese that Taiwan is ready to accept all TPP rules and that she wants the island's friends in Japan to support the effort.

Japanese government officials welcomed Taiwan's declaration. Among them were Foreign Minister Toshimitsu Motegi, Chief Cabinet Secretary Katsunobu Kato and Yasutoshi Nishimura, the state minister in charge of economic and fiscal policy and economic revitalization.

Noting the TPP agreement stipulates that countries and separate customs territories may join, the Japanese government has explained that Taiwan's accession to the TPP is "possible" under the agreement.

Under this logic, the only hurdle Taiwan needs to overcome is to meet the bloc's high standards.

The first working group on the U.K.'s membership bid was held virtually on Tuesday. As this year's chair of the CPTPP Commission, Japan can claim credit for a smooth start to the first new application since the trade pact took effect in 2018.

But Japan's role as chair is not over. With three months left before handing the torch to Singapore, Japan should pull out all the stops to lay the appropriate path for the medium- and long-term development of the CPTPP.

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