Chinese trade updates
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China has made a bid to enter a transpacific trade pact originally designed by Washington to limit Beijing’s growing economic and political influence in the region.
The Chinese Department of Commerce on Thursday announced that Beijing’s application for the Comprehensive and Progressive Agreement for Trans-Pacific Partnership had been transmitted over the telephone to New Zealand, which handles requests for membership.
The predecessor for the CPTPP was the Trans-Pacific Partnership, a trade agreement signed in 2016 by the US, Australia, New Zealand, Japan and seven other countries. It was originally negotiated by then US president Barack Obama to ensure that Washington, rather than Beijing, kept a hand over regional trade and investment rules.
His successor Donald Trump pulled out of the deal in 2017, leaving Japan to spearhead its reformation into the CPTPP, which came into force the following year.
Beijing’s application comes as Australia, the UK and US struck a security pact allowing Canberra to purchase nuclear-powered submarines to offset an increasingly assertive China. Beijing condemned the move, accusing the three countries of having an “outdated cold war zero-sum mentality”.
China’s request to join the trade pact underlines the increasingly complex relations between Beijing and its neighbours. Despite rising geopolitical tensions in the Indo-Pacific, economies are highly dependent from one another. Beijing views deepening trade and investment ties as key to counter growing hostility in capitals including Washington, Canberra, London and Tokyo.
A CPTPP membership is far from certain for China. Existing signatories are likely to object to the country’s use of state subsidies, restrictions on free cross-border data flow and opacity surrounding domestic labour conditions.
The addition of new members requires unanimous consent among existing members, including Japan and Australia — both of which have experienced greater frictions with China over the past year.
Beijing slapped tariffs and import bans on Australian agricultural goods after Canberra supported calls for an international inquiry into Beijing’s handling of the Covid-19 pandemic last year.
Xi Jinping first expressed interest in joining the trade pact at the Asia-Pacific Economic Cooperation summit in November last year, in a speech saying he “will favourably consider” joining. It came five days after Beijing secured a political coup signing the Regional Comprehensive Economic Partnership, a wide-ranging trade pact covering 15 countries in the Asia-Pacific, bringing Asia closer to becoming a cohesive trading zone.
But the CPTPP is a more comprehensive trade pact than the RCEP, with wider liberalisation in tariffs and investment flows.
The UK submitted its application to join the CPTPP in February this year in a move to gain access to trade and invest with its 11 signatories after exiting the European Union.