[CTC] China Seeks to Join Pacific Trade Pact After U.S. Forms New Security Alliance

[Arthur Stamoulis]

https://www.wsj.com/articles/china-seeks-to-join-pacific-trade-pact-after-u-s-forms-new-security-alliance-11631813201?page=1 <https://www.wsj.com/articles/china-seeks-to-join-pacific-trade-pact-after-u-s-forms-new-security-alliance-11631813201?page=1>

China Seeks to Join Pacific Trade Pact After U.S. Forms New Security Alliance
By Lingling Wei 
9/16/2021
 
NEW YORK—China has formally applied to join an 11-nation Asia-Pacific trade pact, seeking to draw traditional American allies into its economic orbit as competition for alliances heats up between Beijing and Washington.

The announcement that China will try to join a pact that was initially championed by former President Barack Obama to counter China came a day after the Biden administration unveiled a new security partnership with the U.K. and Australia <https://www.wsj.com/articles/u-s-forms-a-new-security-alliance-for-asia-with-the-u-k-and-australia-11631741734?mod=article_inline> in the Indo-Pacific as Beijing’s influence grows in the region.

China’s Commerce Ministry announced Thursday that it submitted the application for the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP in short, to New Zealand, the depositary member of the agreement.

“It underscores that both the U.S. and China are actively courting partners and looking for coalitions to join or create to promote their interests,” said Wendy Cutler, vice president of the Asia Society Policy Institute, a think tank, and a former senior U.S. trade negotiator.

As tensions between the U.S. and China <https://www.wsj.com/articles/biden-trump-xi-china-economic-trade-strategy-policy-11609945027?mod=article_inline> continue to rise on many fronts, both President Biden and Chinese leader Xi Jinping have stepped up the tug of war for global leadership.

With its application for the CPTPP membership, Mr. Xi is seizing on the irony of seeking to join a pact with standards set by American negotiators but rejected by a U.S. president. In 2017, former President Donald Trump <https://www.wsj.com/topics/person/donald-trump> pulled the U.S. out of an early version of the deal, complaining it was a job killer. Mr. Biden has said it needs to be renegotiated before he would consider joining.

Within China, some analysts have described Beijing’s desire to join the CPTPP  as the leadership’s continued commitment to embracing international standards—even though recent policy and regulatory actions taken by the Chinese government run counter to most market-based provisions under the pact, which calls for free flows of data <https://www.wsj.com/articles/chinas-new-power-play-more-control-of-tech-companies-troves-of-data-11623470478?mod=article_inline>, revamping state-owned enterprises and better protection of intellectual property.

“The leadership sees joining the CPTPP as a good way to further the openness of the Chinese economy,” said Wang Huiyao, president of the Center for China and Globalization, a Beijing think tank. Mr. Wang’s team proposed to the central leadership that China consider joining the trans-Pacific partnership as soon as Mr. Trump got the U.S. out of it.

Initially, the idea of participating in something that was originally championed by the U.S. had met a lot of resistance among various ministries and agencies in Beijing. Mr. Xi’s declaration last year that China would favorably consider joining the pact put the debate to an end.

Thursday’s announcement by China’s Commerce Ministry also said its minister Wang Wentao had held a teleconference with his Australian counterpart, Damien O’Connor, to discuss follow-up work related to China’s application for accession.

Having made the CPTPP application, China now needs to be accepted as a working party by the members of the pact.

Analysts say Beijing’s submission could cause friction among the members. Some of them, including Japan, have already said China must demonstrate its willingness and ability to meet the CPTPP standards to be accepted into the club. Others, such as Singapore, are more receptive to Beijing’s participation.

The accession process could take years, if not decades, trade experts say. Some worry that Beijing could tie the West up in endless negotiations without actually completing any agreement.

“China has nothing to lose by expressing its interest in joining the CPTPP agreement, but a lot to gain,” Ms. Cutler said.

In years past, China generally preferred a divide-and-conquer strategy, dealing with countries one by one, rather than in multilateral forums, but being locked in a painful tit-for-tat trade battle with the Trump administration has prompted a re-evaluation of that strategy.

For Mr. Xi, multilateral approaches are now seen as easier to deal with and more effective, say officials and foreign-policy experts. In fact, Beijing now rarely talks about preferring unilateral negotiations. Instead, it has stepped up efforts to build alliances of nations sharing a common goal, especially in trade and investment, and has focused efforts on getting more sway at multilateral organizations like the United Nations <https://www.wsj.com/articles/how-china-is-taking-over-international-organizations-one-vote-at-a-time-11601397208?mod=article_inline>.

In November, Beijing signed a regional trade pact, the Regional Comprehensive Economic Partnership <https://www.wsj.com/articles/asia-pacific-nations-sign-major-china-backed-trade-deal-11605434779?mod=article_inline>, with 14 other nations, including Japan, South Korea and Australia. Beijing’s interest in completing the pact grew with each trade sanction from the Trump administration.

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826




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