China joining the CPTPP will benefit everyone, so why won’t the West let it?

China joining the trade pact would be a catalyst for economic reforms that address developed countries’ complaints while offering member nations easy access to the world’s largest consumer market
With Beijing showing readiness to take the steps needed to meet CPTPP standards, geopolitics seems to be the major obstacle

Zhou Xiaoming

Published: 1:00am, 12 Aug 2023

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The decision by members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in mid-July not to take action on China’s application to join the trade pact, was disappointing and took many in China by surprise.

The CPTPP operates on the principle of consensus. The existing members must give unanimous support before any other country is allowed into the trading club. It was clear before the meeting that members were divided in their positions on China’s application. While Malaysia, Singapore and Vietnam have backed China’s participation in the free-trade zone, Japan, Australia and Canada have expressed reservations.

China filed for CPTPP membership in September 2021, just months after the UK, which was welcomed into the fold at last month’s meeting. The lack of progress on China’s application means that the decision on its bid will be put on hold until the next meeting, which will only take place next year.

For nearly two years, China has made serious efforts to woo CPTPP members and engage them in informal discussions. It has identified the reforms it would need to undertake to meet the CPTPP standards, and it is starting pilot programmes for CPTPP rules and standards in Hainan and some of its free-trade zones.

China’s CPTPP membership is thought to be conducive to the development of a regulatory regime consistent with prevailing rules and norms in international trade and investment. Its accession to the World Trade Organization (WTO) in 2001 prompted the drafting, amendment or abolition of more than 2,300 measures at the central government level. Bringing its rules in line with those of the CPTPP, as required for its accession, would address many of the complaints of developed countries.

For CPTPP members, China’s accession means easier access to the world’s largest consumer market and a global manufacturing hub where quality products at competitive prices are readily available. It also means gaining an advantageous position in sharing the opportunities of the country’s sustainable development.

The economic benefit for the world as well as CPTPP members makes a strong case for cheering on China’s push to join the trade pact. Why would any country want to pour cold water on China’s embrace of CPTPP?

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CPTPP could become game changer and supplant 'out-of-date' WTO, after mainland China, Taiwan apply

The CPTPP – which was known as the Trans-Pacific Partnership when it first emerged during the Obama administration – was conceived as a way of balancing China’s influence in the Asia-Pacific. In an indication of the current sentiment in the West over the issue of China joining the CPTPP, Bloomberg ran an editorial in April headlined “Don’t give China a pass on Pacific trade pact”. In March, former British prime minister Liz Truss said Britain must use its membership in the bloc to stop China from joining.

Geopolitical concerns have replaced economic considerations as the decisive factor in major economic decisions. The European Parliament has suspended the ratification of the European Union’s comprehensive investment treaty with China. The lack of progress in talks on a free-trade agreement among China, Japan and South Korea is largely because of political differences between them.

Why Britain joining the CPTPP is clearly not about the economy

The barriers to China gaining admission to the CPTPP are not technical, though meeting its rigorous standards would entail challenging and perhaps painful changes. Instead, it is geopolitics that will determine the outcome of China’s CPTPP bid.

Given the tensions between China and some Western members of the CPTPP, it is unlikely that these governments would be prepared to consent to China’s accession any time soon. While it is not part of the bloc, the United States still looms large over the CPTPP’s discussions. At a time when the US is striving to counter China’s influence across the globe, it would be hard to imagine it supporting China’s admission.

It is clear that some in Washington regret supporting China’s accession to the WTO, which the Trump administration described as a mistake. This time, it appears, the US is determined to make sure things go correctly.

It took China 15 years to complete the negotiations on its WTO accession. Its journey to joining the CPTPP looks to be a similar protracted and gruelling process.

Shi Guangsheng (centre), then China’s trade minister, signs a document confirming China’s membership of the World Trade Organization on November 11, 2001, in Doha, Qatar. Photo: AP

It takes two to tango. When some countries in the CPTPP have made up their minds to keep China out, no amount of effort on China’s part will open the door. Its enthusiasm for joining the bloc will lead nowhere despite the delay in starting negotiations or a rejection of China’s application likely to result in both China and the CPTPP losing out.

While it is the biggest one at the moment, the CPTPP is not the only game in town. China would be well-advised to adjust its focus and prioritise the countries or regions that offer good prospects for successful talks.

While continuing to engage CPTPP members, it would do well to divert more resources to promising free-trade agreement talks such as with the Gulf Cooperation Council and other members of the Brics grouping comprising Brazil, Russia, India, China and South Africa. Fraught as these negotiations might be, there are no insurmountable geopolitical barriers on which the success or failure of a particular endeavour depends.

At the same time, China should waste no time calibrating its rules and systems to meet the high standards of the CPTPP. The external pressure arising from this alignment is sure to drive reform in the country, which in turn will contribute to the development of a new, more open economic system, China’s ultimate objective in its economic reform. This is the essence of China’s bid to join the CPTPP.

Zhou Xiaoming is a senior fellow at the Centre for China and Globalisation in Beijing and a former deputy representative of China’s Permanent Mission to the United Nations Office in Geneva