China has submitted the official application letter to join New Zealand’s Comprehensive and Progressive Trans-Pacific Partnership Agreement, according to a statement Thursday evening in Beijing. Minister of Commerce Wang Wentao had a telephone interview with his counterpart Damien O’Connor, New Zealand being the depository country of the agreement.
The bid will certainly elicit a reaction from Washington, where a number of lawmakers had previously expressed concern over China’s efforts to join. However, there is no indication that President Joe Biden’s administration is interested in joining the deal.
The original deal was envisioned by the United States as an economic bloc to offset China’s growing power, with then-President Barack Obama saying in 2016 that the United States, not China, should draft regional trade rules. His successor Donald Trump withdrew from the deal in 2017, with Japan leading the revised and renamed pact to a successful conclusion the following year.
The candidacy is the result of months of behind-the-scenes discussions after President Xi Jinping said in 2020 that the nation was interested in joining. China is the second country to apply to join the 11-country deal, after the UK applied for membership earlier this year.
“This is a perfectly rational calculation on the part of the Chinese leaders,” said Hosuk Lee-Makiyama, director of the European Center for International Political Economy in Brussels. “Considering how the Chinese market is driving economic recovery, their cards will never be so strong again. Or rather, the cost of rejecting China’s candidacy will never be higher.
Membership negotiations will not be straightforward – China and CPTPP member Australia are in the midst of an economic and trade dispute that has seen China impose tariffs or freeze billions of dollars in Australian exports. Yet, last week, China publicly pressured Canberra to support joining the deal.
Canada is also in conflict with China, with a Canadian citizen jailed for 11 years and another still awaiting conviction in cases believed to be related to the arrest in Canada of the daughter of the founder of Huawei Technologies Co.
The negotiations could also be lengthy. The UK is looking to conclude membership talks by the end of 2022, the former UK trade secretary said in August.
A former U.S. trade official said China’s membership in the group was uncertain given its trade regime and focus on more central control of its economy.
“It is extremely difficult, if not impossible, to see how they could adopt the CPTPP rules governing state-owned enterprises, labor, e-commerce, free flow of data, among others, as well as full commitments on access. to the market, ”said Wendy. Cutler, Vice President of the Asia Society Policy Institute and former Acting Deputy US Trade Representative.
Another expert was more confident that China will succeed.
“In the long run, they will be able to sort out some of the differences, especially as these countries realize that China is going to be the biggest market for them and that the United States is not going to join them anytime soon.” said Henry Gao, associate professor of law at Singapore Management University, who has written extensively on Chinese law and the World Trade Organization.
But that won’t happen anytime soon, he said, as “the accession process would probably drag on for a few years.”
The US administration has not announced any concrete trade policies for the region, although there are reports that it is discussing a digital trade deal covering Asia-Pacific economies.
The CPTPP is the third largest free trade agreement behind the $ 26 trillion Regional Comprehensive Economic Partnership and the $ 21.1 trillion United States-Mexico-Canada Agreement. China’s addition to the CPTPP would make it the most valuable free trade deal ever to be signed.
The 11 signatories of the CPTTP have a combined economic value of about $ 13.5 trillion, or about 13% of the world’s gross domestic product.