Chinese Trade Updates
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China has made an offer to strike a Trans-Pacific Trade Pact originally designed by Washington to limit Beijing’s growing economic and political influence in the region.
The Chinese Ministry of Commerce announced Thursday that Beijing’s application for the Comprehensive and Progressive Agreement on Trans-Pacific Partnership had been transmitted by telephone to New Zealand, which is processing membership applications.
The CPTPP’s predecessor was the Trans-Pacific Partnership, a trade agreement signed in 2016 by the United States, Australia, New Zealand, Japan and seven other countries. It was originally negotiated by then-US President Barack Obama to ensure Washington, rather than Beijing, retains control of regional trade and investment rules.
His successor Donald Trump withdrew from the deal in 2017, leaving Japan to lead its reform in the CPTPP, which came into effect the following year.
Beijing’s candidacy come as Australia, the UK and the US have struck a security pact allowing Canberra to purchase nuclear-powered submarines to compensate for an increasingly assertive China. Beijing condemned the movement, accusing the three countries of having an “outdated zero-sum cold war mentality”.
China’s demand to join the trade pact underscores the increasingly complex relationship between Beijing and its neighbors. Despite rising geopolitical tensions in the Indo-Pacific, economies are highly dependent on each other. Beijing sees deepening trade and investment ties as key to countering growing hostility in capitals such as Washington, Canberra, London and Tokyo.
Membership in the CPTPP is far from certain for China. Existing signatories are likely to oppose the country’s use of state subsidies, restrictions on the free flow of data across borders, and opacity surrounding national working conditions.
Adding new members requires the unanimous consent of existing members, including Japan and Australia, both of whom have experienced greater friction with China over the past year.
Beijing has imposed tariffs and import bans on Australian agricultural products after Canberra backed calls for an international investigation 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 “would favorably consider” joining it. It came five days after Beijing won a political coup by signing the Regional Comprehensive Economic Partnership, a sweeping trade pact spanning 15 Asia-Pacific countries, bringing Asia closer to one area. cohesive business.
But the CPTPP is a more comprehensive trade pact than the RCEP, with broader liberalization of tariffs and investment flows.
The UK submitted its application to join the CPTPP in February this year with the aim of accessing trade and investing with its 11 signatories after leaving the European Union.