Will China change CPTPP, or CPTPP change China?

Members should negotiate carefully and strongly adhere to the pact's principles.

China's bid to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) has split observers, with some seeing it as a potential opportunity to spur economic change and others, including this reporter, believing that countries should move with caution.

The first side claims that the CPTPP's membership standards are extremely precise and severe, leaving little possibility for exceptions for China. Given this, it is thought that engaging with China's offer will encourage Beijing to adopt more equitable and transparent standards.

If CPTPP countries can stick to the idea of refusing exceptions to the pact's criteria and Beijing agrees to move forward under these conditions, the door should not be shut in China's face.

Going down this road, however, necessitates, at the very least, careful planning and solidarity among CPTPP members.

Even though, bargaining with an economic behemoth like China is fraught with danger.

The main source of concern is that it is still unclear whether Beijing applied with the goal of fully complying with the CPTPP's requirements. Even diplomatic sources and analysts familiar with internal talks inside President Xi Jinping's government dispute over the sincerity with which he is pursuing this goal.

Chinese President Xi Jinping applauds at a meeting commemorating the 110th anniversary of the Xinhai Revolution at the Great Hall of the People in Beijing on Oct. 9.   © Reuters

Some say the idea is to leverage the CPTPP as outside pressure to force economic reform, pointing to recent changes to government procurement practices and labor standards as examples.

Others contend that China went into the application process intending to seek exemptions from CPTPP requirements from the outset. The country ranks 107th on the Washington-based Heritage Foundation's Index of Economic Freedom, well below CPTPP members' average of around 30.

The pact requires members to significantly loosen restrictions on cross-border data flows and end forced labor and special treatment for state-owned enterprises. Xi's policies have run counter to this.

"During negotiations on China's entry into the World Trade Organization, there were many who believed that outside pressure would bring its economic system closer to those of Western countries," said Wu Junhua, research director at the Japan Research Institute.

"But China is now brimming with confidence that its economic model is superior," Wu said. "Rather than bringing itself closer to the CPTPP's standards, it may be planning to pull the CPTPP closer to it by carving out exceptions."

China's then Foreign Trade Minister Shi Guangsheng signs the membership document at the signing ceremony for China's new membership to the WTO in Doha, November 11, 2001.   © Reuters

The Xi administration has already begun wooing CPTPP members, securing support or welcome for its application from Singapore, Brunei, Mexico and New Zealand.

Still, the CPTPP is designed not to allow such exceptions. Joining the bloc would require China to agree to meet all of its requirements and to submit a detailed action plan on areas where it falls short.

The CPTPP granted grace periods to its 11 current members for meeting certain obligations. According to a senior trade official of a member nation, member states have agreed not to do the same for new entrants.

But the CPTPP does allow for exceptions to the agreement's rules for "essential security interests" under Chapter 29, Article 2.

How far "essential" extends is for practical purposes left up to each member country. To avoid surprises, existing members will need to demand that China discloses the extent of its national security interests with respect to the CPTPP.

Soon after China made its move, Taiwan submitted its application to join the CPTPP. The treaty has no restrictions on the island's membership because it is an economic arrangement. According to the Heritage Foundation's Economic Freedom Index, Taiwan is ranked sixth. It is also a member of the World Trade Organization.

Taiwan's membership application should be discussed with China in order to obtain assurances that it will not obstruct Taiwan's admission.

If China accepts all of the CPTPP's provisions and joins, it will have a significant impact on Asia-Pacific geopolitics, especially in the absence of the United States. To have a truly full debate about Chinese membership, members must begin discussing this scenario immediately.

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