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Why China Wants to Join the CPTPP & What It Will Mean

1: What is the CPTPP?

CPTPP stands for “Comprehensive and Progressive Agreement for Trans-Pacific Partnership”, an 11-country (and now possibly 12-country) free-trade agreement that sets a goal of driving non-tariffed trade and foreign investment between those countries. These include countries Canada, Chile, Mexico, Japan, and Australia.

A map showing the 12 Pacific nations currently involved in the CPTPP. Cho Sang-won

2: Why Was it Started?

The CPTPP started as the TPP, or Trans-Pacific Partnership originally, in 2016 and was driven by former US president Barack Obama He wished to stop the growing influence of Chinese political capital in the other countries by introducing new US labor, along with protections that would help those countries as well. In short, the TPP was mainly formed by Obama for the purpose of reinforcing the United States’ authority over trade in the pacific. In 2017, however, Barack Obama’s successor, former US President Donald Trump pulled out of the partnership in favor of other endeavors. In December of 2018, the TPP was formed into the CPTPP while the United States was withdrawn. In general, the purpose of the CPTPP is to encourage trade between the participants by cutting tariffs, standardizing certain regulations, and determining certain restrictions on market access for some goods and services.

3: A Rudimentary Timeline of US Presidents’ Opinions of the TPP/CPTPP:

  • 2015: Donald Trump, 2 years before he becomes president, expresses distaste for the TPP, tweeting “The Trans-Pacific Partnership is an attack on America’s business. It does not stop Japan’s currency manipulation. This is a bad deal” (WashingtonPost).
  • 2016: Barack Obama vehemently supports the TPP, as he is the main driver behind the agreement. Then-Vice President Joe Biden agrees with Obama in his push for the trade agreement. The deal was signed by 12 countries in February.
  • 2017: Donald Trump is elected and withdraws from the agreement on his third day of presidency, believing it is harmful to American workers. 
  • 2018: President Trump states that he would be open  to the agreement if it could be renegotiated. In April, he asked some officials to look at rejoining the agreement.
  • 2019: Current President Joe Biden states he would “not rejoin the TPP as it was initially put forward”(CNN), walking back his previous position. He expressed that he wishes he could renegotiate it, echoing former President Trump’s opinion.
  • Current Day: No official current opinion by the Biden administration on the  CPTPP or China’s application.
Former President Barack Obama engaging in TPP talks. Getty Images

4: Why is China Joining the CPTPP?

China’s intentions to join the CPTPP are not extremely clear at this moment, but it seems that Chinese government leaders began to direct their attention towards joining the CPTPP immediately after the United States withdrew from the trade agreement in 2017. Only recently, however, in September of 2021, they formally announced their application for a seat in the CPTPP. This points towards China’s intentions to take back the political influence they once had in the trans-pacific trade circle before the United States intervened there. Moreover, their recent application shows that Chinese officials now have the confidence to take a control position as the second-biggest economy in the world, right behind the United States. Other major economies within the CPTPP include Australia, Canada, Japan, and Mexico; there are even talks of the United Kingdom joining soon. For this reason, China has a major opportunity to expand its political clout by joining the partnership.

5: What Happens Next?

Although China is a major economy, there are a few barriers blocking its way into the partnership. Firstly, with joining the CPTPP, members must adhere to a series of guidelines, which include restrictions on things like e-commerce and data privacy– something that will be hard for China to comply with considering their past history of data mining and government interference with data privacy. Moreover, countries like Canada and Mexico have trade agreements with the united states that disobey them from signing foreign trade agreements with China. Overall, there are many hurdles for China to jump over before they get into the CPTPP. This is exemplified by Economy Minister Nishimura Yasutoshi of Japan, the CPTPP chair this year, who said: “it’s necessary to determine whether China… is ready to meet [the CPTPP’s] extremely high standards” (Reuters). Such a statement makes it clear that it will not be easy for China to bridge the gap between itself and the other countries, pointing to the possibility that it may be a very long time before China has a real opportunity to join the partnership.

Sources

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