China intensifies efforts to enter into trade deal to exclude it

The Trans-Pacific Partnership was envisaged by the US as an economic bloc to balance China’s growing power.

China is stepping up behind-the-scenes negotiations to engage in a major trade deal, whose original objective is to exclude Beijing and strengthen US economic power and trade relations in the Asia-Pacific region.

Officials in Australia, Malaysia, New Zealand and possibly other countries have held technical talks with Chinese counterparts on the details of a broad and progressive trans-Pacific partnership. This is with knowledge of the discussion, according to officials from the four member states, who asked not to be named as they were not authorized to comment on the talks.

China announced in February that it had informal talks with some members, but did not release details. It is unclear how much progress China has made in preparing an application, but people are seriously interested in getting Beijing involved, with many officials pointing to President Xi Jinping’s comments last year as a sign of intent Was.

Deborah Elms, founder and executive director of the Asian Trade Center in Singapore, said, “China would not have made a statement about joining TPP if they had not studied this menu beforehand and said, ‘Actually, we Happy with it. “

The Trans-Pacific Partnership was envisaged by the US as an economic bloc to balance China’s growing power, in 2016, then-President Barack Obama said writing regional rules of trade to the US, not China needed. His successor Donald Trump pulled out of the deal in 2017, with Japan reaching a successful conclusion to the revised and designated agreement the following year.

Commerce Minister Wang Ventao said in early March that Beijing had “done a lot of preparatory work and made some informal contacts”. “We are increasing efforts in this area.” The ministry did not respond to a request for more information about the progress of the talks.

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Many of the CPTPP countries rely heavily on trade with China, but some countries may find it difficult to agree on entry due to China’s growing bad image. Concerns over labor practices, state-owned companies, and its economic confrontation with the US also pose potential barriers to entry.

Many of the CPTPP countries rely heavily on trade with China, but some countries may find it difficult to agree on entry due to China’s growing bad image. Concerns over labor practices, state-owned companies, and its economic confrontation with the US also pose potential barriers to entry.

Controversial relationship

If it joins, China will become the largest economy in the partnership and will further strengthen its position at the center of trade and investment in the region. Beijing helped lead a separate regional trade agreement known as the RCEP last year, but would need to make additional concessions to join the CPTPP and achieve the agreement of all 11 members – including Australia, Canada and Japan , Includes allies of the US. With whom its relations are becoming difficult.

The possibility of any application by Beijing is remote, as members are currently working through a UK application and China is still examining the requirements. According to some foreign officials, various Chinese government departments, think-tanks and academics are analyzing the text to find out what needs to be done to get involved and study the attitudes of member states.

Some of those officials suspected that China could meet the requirements of the deal, particularly provisions on labor, procurement, state-owned enterprises, subsidies, e-commerce and cross-border data transfers.

The treaty calls upon members to protect the rights and laws included in the International Labor Organization’s 1998 Declaration, which guarantees the freedom of union and collective bargaining, the forcible or termination of child labor, and the elimination of employment discrimination. China does not allow free trade unions and has been accused of forcibly using labor.

The dominant position of China’s state-owned enterprises in the economy would also be difficult to square with the deal, although some current CPTPP members also have substantial state involvement in their economies.

No concession

Joining the CPTPP requires the consent of existing members, who say that there will be no concession for new members. According to a member country official, the deal is not an a la carte menu from which China can pick and choose, but rather a full-course meal prepared by 11 members together. The official said that even though China may delay parts of the menu, in the end it should eat the entire meal.

According to the Elms of the Asian Trade Center, this clarity may work in China’s favor, as there is very little uncertainty that usually surrounds negotiations.

“China has the text, they know what the rules are, they know what the commitments are,” she said.

However, Japan, which is the largest economy in the deal at the moment and this year’s CPTPP chair, seems to have little appetite for a sharp Chinese push to join. Before considering a potential Chinese application, Japan believes negotiations with South Korea and China on a trilateral free-trade agreement should be concluded, based on regional comprehensive economic partnerships, according to the two officials.

National barriers

Those trilateral talks have not progressed much in recent years amid historical disputes between Japan and South Korea. In addition, Japan wants to see how China implements its promises under the RCEP before looking at any new trade deal, according to a senior official aware of the situation in Tokyo.

Another complication is Taiwan, which says it has negotiated with all CPTPP members and will officially apply when the time and conditions are correct. Taiwan’s Foreign Minister Joseph Wu said last month that he hoped China’s efforts to join the agreement would not prevent Taiwan from joining either.

China opposes Taiwan’s involvement in any international organization or agreement. Taiwan is also trying to pursue trade deals with the US and Japan, which may affect the CPTPP’s approach.

US position

Even though the US is not a member of the deal, its status will be an important factor in any Chinese application. Many of the CPTPP members are allies or friends of the US and still hope that it will eventually return to the deal. They may decide to delay making decisions on China, to see if the US changes course again under the Biden administration.

While at least some in China believe entry does not require an adversarial process, the head of the US Chamber of Commerce in China recently said that both parties should be involved in the deal. This is similar to what was proposed by a retired senior Chinese official.

“We hope China can be included in the TPP and the US should return to the TPP,” former trade negotiator and deputy commerce minister Long Yongtu said recently at the Boao Forum. “Of course, it is difficult, but we hope the US and China will try.”

Long know how difficult any discussion can be: He led the final negotiations to bring China to the World Trade Organization two decades ago, after nearly 15 years of negotiations.

(Except for the title, this story has not been edited by NDTV staff and published from a syndicated feed.)

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