China announced this month that it has officially applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), one of the world’s largest free trade areas. A quick recap: Yes, this is the trade pact that began as part of the U.S. effort to contain China’s growing influence in the Pacific Rim.
Why did China make this move, and what happens now? The simple answer is that the 11 CPTPP members — Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam — will decide whether to allow China to join the pact.
Here’s what makes Beijing’s membership bid complicated: China’s trade practices and trade rifts — and China’s growing rivalry with the United States.
Why is China keen to join?
Joining the CPTPP would be a major symbolic and strategic victory for China. The agreement originated as the Trans-Pacific Partnership (TPP), a mega-regional free trade deal championed by the Obama administration as a cornerstone of U.S. strategy for engagement in Asia.
The trade pact was intended to bolster U.S. alliances and counter China’s growing power in the region. With its members encompassing 40 percent of global GDP, the TPP could provide a channel for the United States to write the rules of global trade, many analysts predicted.
The Trump administration, however, announced in 2017 that the United States would withdraw from the TPP. The remaining members forged ahead with the agreement, which became known as the CPTPP.
Okay, the Trans-Pacific Partnership is dead. What was it?
China now seeks to replace the United States as the economic hub of the agreement. The Global Times, a state-run newspaper and mouthpiece for the Chinese Communist Party, described this as a landmark move that aims to “cement the country’s leadership in global trade” and leave the United States “increasingly isolated.”
For Beijing, joining the agreement would further bolster its economic clout — and consolidate its growing dominance in the Asia-Pacific region and beyond. Membership would deepen China’s trade and investment ties with CPTPP members, placing China firmly at the center of regional and global supply chains.
Notably, Beijing’s application to join the pact came just one day after the announcement of the new AUKUS defense partnership between the United States, Britain and Australia, aimed at countering China’s growing military power in the region.
What’s the big ruckus over the new defense partnership with the U.K. and Australia?
Members may face pressure to support China’s bid
China’s economic weight exceeds that of all the existing CPTPP members put together, giving it considerable leverage in its push to join the agreement.
China is already the largest export market for most CPTPP members, making it likely they will come under significant pressure to support Beijing’s bid to join the trade agreement. Some participants may also support China’s membership as a means to expand their market access to the world’s second-largest economy. Singapore and Malaysia, for instance, have already indicated that they welcome Beijing’s interest in joining the trade pact.
Trade experts question whether China will be able to meet the high standards of the agreement, such as its strict rules on industrial subsidies and support for state-owned enterprises. However, since many CPTPP participants depend heavily on trade with China, they may be pressured to lower the standards of the agreement to accommodate Beijing.
Sources of potential resistance
A number of other countries, including South Korea, Indonesia and Thailand, have also expressed interest in joining the CPTPP. Britain’s accession process is already underway, and Taiwan has filed a formal bid to join. Members largely see the expansion of the CPTPP as an important way to broaden and strengthen the agreement.
But several members are likely to be concerned by the prospect of extending membership to China. Under President Xi Jinping, Beijing has frequently violated global trade rules, using its economic might to bully weaker countries, and several CPTPP members have been victims of China’s trade aggression.
In 2019, China blocked imports from Canada in retaliation for arresting a Huawei executive to face fraud charges in the United States. While the case now seems resolved, Beijing’s trade restrictions against Canadian pork, beef, soybeans and canola caused Canada to lose $4 billion in export sales. And until last week, China had arbitrarily imprisoned two Canadians, Michael Spavor and Michael Kovrig, since 2018.
China similarly blocked imports from Australia, protesting calls for an independent inquiry into the covid-19 outbreak and Canberra’s complaints about Chinese Communist Party interference in Australia’s domestic politics. Australia’s largest trading partner, China, purchases nearly 40 percent of Australian exports. Beijing’s import curbs — a lengthy list of goods including coal, copper, timber, wine, beer, cotton, barley, beef, lamb, lobster, sugar, wheat and wool — are intended to inflict maximum economic pain across Australia’s key export industries.
In violation of World Trade Organization rules, Beijing has used the threat and imposition of trade restrictions to punish over a dozen countries for various reasons.
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Certain CPTPP members — particularly Canada and Australia — are therefore likely to be highly wary of Beijing’s bid to join the agreement. Beijing, in short, has a credibility problem regarding its willingness to abide by the rule of law in trade. A number of analysts question whether China can be trusted to abide by the terms of the CPTPP.
How might the United States respond?
CPTPP members had left the door open for the United States to rejoin the agreement, prompting considerable speculation about what the United States might now decide to do.
Early on, the Biden administration put the domestic policy agenda as the top priority, indicating that new trade agreements were on the back burner. However, Beijing’s effort to join the CPTPP could create new motivation for the United States to seek to rejoin the agreement in order to beat China to the punch.
Since the United States played a major role in writing the rules of the CPTPP in the first place, it would be relatively straightforward for it to rejoin — and probably much easier for the United States to meet the high standards of the agreement than China.
For the Biden administration, rejoining the CPTPP could prove attractive as the United States seeks to strengthen economic and political relationships with key countries in the Pacific Rim, while countering China’s growing influence in the region.
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Kristen Hopewell is the Canada research chair in global policy at the University of British Columbia and the author of “Clash of Powers: US-China Rivalry in Global Trade Governance” (Cambridge University Press, 2020).
