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The Nikkei View

China's TPP ambition should be viewed with caution

Members must avoid sacrificing standards to expand pact

Chinese President Xi Jinping speaks at a CEO forum via video link ahead of the APEC leaders' summit on Nov. 19.    © Reuters

At the recent Asia-Pacific Economic Cooperation leaders' summit, Chinese President Xi Jinping said that Beijing would consider joining the Trans-Pacific Partnership trade agreement. Foreign Minister Wang Yi, who recently visited Japan, further explained China's position after Xi's remarks.

Chinese leaders seem intent on gaining the upper hand in the contest for leadership in the Asia-Pacific before the change in administrations in the U.S. But can China meet the requirements to join the TPP? The 11 member countries should be cautious.

In addition to expressing interest in the TPP, China has joined the Regional Comprehensive Economic Partnership, a trade agreement centered on East Asia. Some within China want to leverage China's position in the massive free trade zone to advance domestic reforms.

Yet, the timing of Xi's reference to joining the TPP is likely a political calculation made in anticipation of the Joe Biden administration assuming office in the U.S. One of President Donald Trump's first acts after taking office in 2017 was to pull the U.S. out of the trade pact. After Biden takes power, the possibility of U.S.'s return to the pact cannot be ruled out.

Xi's move is also thought to be aimed at blocking Taiwan from participating in the free trade pact.

Even if Xi is serious, the barriers to joining the TPP are significant. Compared with RCEP, the level of tariff liberalization is higher, and the rules, such as the protection of intellectual property rights and the prohibition of forced technology transfers, are stricter.

It is unlikely that China would rethink its industrial policy and state-owned enterprises, which are fundamental to its one-party communist dictatorship and model of state capitalism. Indeed, pressure for these kinds of structural reforms from Europe, Japan and the U.S. has been rebuffed at every turn.

Expanding the membership of the TPP, which came into effect at the end of 2018, is certainly an important issue. It is unfortunate that Thailand, which was a strong candidate to be the next to join, has yet to settle on a course of action because of domestic resistance.

But if nations relax the level of tariff liberalization and the rules for trade and investment for the sake of expanding membership, that is mistaking the means for the end. Any discussion of China's participation should be premised on the acceptance of current standards. Current members should remain firm on this point.

Another issue is outreach to the U.S. Some of the industrial and trade policies of the incoming Biden administration stand out in their protectionist tone. A return of the U.S. to the TPP is seen as a delicate issue for the time being.

U.S. involvement is necessary to prevent excessive Chinese influence in the Asia-Pacific. As Washington reasserts itself in the international order, Japan should take the lead in bolstering the U.S. presence in Asia and bringing it back to the TPP.

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