Don’t count China outside CPTPP – The Diplomat
Since China first expressed interest in joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) last November, a particular sticking point has repeatedly arisen: how could Beijing meet the demands. entry requirements of the CPTPP? These analyzes precipitate their conclusions and overlook a crucial point. In recent years, Beijing has clearly demonstrated its willingness to consider trading economic concessions for geopolitical gains – see how it approached the Comprehensive Regional Partnership (RCEP) negotiations and the EU Comprehensive Investment Agreement – China (CAI).
Following the conclusion of the RCEP in January, Alex Yu-Ting Lin and Saori N. Katada argued in The Diplomat that Beijing’s motivation to join the CPTPP stemmed from its recognition that the bloc’s membership requirements might give new impetus for national economic reforms. In other words, Beijing is not seeking to join the CPTPP in order to control from within any apparent anti-China or anti-state capitalism sentiment.
China would not be moved within the CPTPP. After all, its 11 members are an eclectic bunch. To date, the main motivation for membership in the CPTPP has generally been that membership can raise a state’s profile as a supporter of free trade; or that the pressure exerted by the membership thresholds will inspire national reforms in areas such as labor rights, environmental protection, intellectual property (IP) protection and the possibility of freer trade customs duties.
Ahead of the tit-for-tat sanctions between the EU and China in May, it emerged that Beijing was willing to politically strike an investment deal with Brussels for the same reason: that the EU-China CAI could still stoking the fires of domestic economic reform in preparation for ratification. After all, the EU-China CAI also contains provisions that have left trade policy analysts perplexed as to whether the deal represented a flip-flop in China’s economic philosophy. These provisions included taking steps to undertake reforms ensuring greater transparency regarding the role of state economies in the economy, improving market access in a range of sectors, facilitating more great openness to foreign companies in the development of national standards and the strengthening of its provisions relating to the protection of intellectual property.
Analysts have greeted Beijing’s deal on Brussels terms in these areas with a healthy degree of skepticism. However, there were also signs that China was serious in its intention to deepen its economic reform policy toolbox to reconfigure its economy in the interest of meeting the standards required for ratification. When I interviewed European Ambassador to China Nicolas Chapuis in March – just after the political conclusion of the EU-China CAI but a few days before the two sides applied sanctions – he said Beijing clearly had taken into account trade and investment relations between the EU and China. seriously because President Xi Jinping had succeeded Prime Minister Li Keqiang in high-level meetings between the two. Moreover, at that time, according to Chapuis, Xi was pushing for both sides to ratify the deal as soon as possible.
While it’s overly simplistic to say that the President’s seal always equates to a done deal – in China’s distinctly opaque political environment, that’s not always the case – it’s a good indication of the importance or absence of a given policy area. It can be deduced that China was at least considering making concessions to the Europeans.
And so, turning our attention back to the CPTPP, it is worth considering the hypothesis: if the tit-for-tat sanctions hadn’t scuttled the CAI indefinitely, would China have made the changes to its economy that its trade negotiators would have known that MEPs in Brussels would have asked? To put it more simply, was China ready to support its major commitments with concrete actions? After all, this is the question the trade teams of the 11 CPTPP member states will ask themselves as they reflect on their response to China’s candidacy.
Like the China-EU CAI, the CPTPP includes provisions that are believed to leave Chinese state planners in shock, such as high standards that go far beyond the removal of human rights. customs. With regulations guiding market access, labor rights and government procurement, the CPTPP offers some of the most liberal trade policies on offer. Like the CAI, Beijing would likely have to ratify outstanding International Labor Organization (ILO) conventions, including provisions on the use of forced labor, to become a member of the CPTPP, based on the Vietnam’s experience in joining the bloc.
But if Beijing was ready to agree to these conditions once, couldn’t it accept them again? Political initiatives such as the “dual circulation strategy” and “common prosperity” appear to be the antithesis of the spirit and ambition of the CPTPP by making China appear more autarkic. But under these charged political statements, China’s trade negotiators have lowered the height of the barriers blocking China’s entry into the CPTPP.
Although far from the levels required to qualify for CPTPP membership, even without an impending ratification deadline, China has continued to make progress in market access – in recent years, the number of restricted measures on the negative list has been reduced by almost two-thirds, a threshold that it should cross in its next reissue. Regarding the environment, according to diplomats in Beijing, China would consider deciding against the financing of coal-fired power generation projects at COP26, which would be an important step in the global fight against climate change. Of course, the ILO Conventions on forced labor are probably far behind; China will continue to assert that it is not obligated to sign them when the United States has only ratified 14 out of a total of 189 (although the United States has ratified Convention No. 105 on the abolition of forced labor). But in areas such as intellectual property protection provisions and improving access for foreign companies to standard-setting, China has also upped the game.
In conclusion, when assessing China’s candidacy for CPTPP membership, it should be considered and remembered that China had already shown its willingness to reform and improve its standards. It would be a challenge, sure, but Beijing shouldn’t be counted on to rise to the occasion.