China probably won’t join trade deal that has replaced TPP, says former US negotiator

05-Dec-2020 Intellasia | South China Morning Post | 6:02 AM Print This Post

Former US trade negotiator Wendy Cutler said China’s entry into a Pacific Rim trade pact was unlikely despite its expressions of interest because it would require economic reforms that Beijing is not prepared to make.

Cutler, who spoke on Wednesday in the annual China conference, organised by the South China Morning Post and held virtually this year, was the US Trade Representative Office’s chief negotiator for the pact reached under president Barack Obama.

If China were to join the CPTPP, it would become a member of the region’s two largest free-trade agreements, neither of which includes the US. Photo: Chinatopix via AP

If China were to join the CPTPP, it would become a member of the region’s two largest free-trade agreements, neither of which includes the US. Photo: Chinatopix via AP

She said she remained sceptical about Beijing joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) even after President Xi Jinping said last month that he would consider making China a member.

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“When I heard Xi Jinping’s comments about positively considering joining the CPTPP, part of me was a bit sceptical, and I see a real divorce between China’s statement and the changes that need to be done on the ground to really join CPTPP,” said Cutler, who is now managing director of the Asia Society Policy Institute’s Washington office.

“China would have to make some big structural reforms and go in a completely different direction than their economy is headed,” she said. “So whether we’re talking about the free flow of data, open labour practices and disciplining state-owned enterprises, these are all areas that China would need to grapple with.”

President Donald Trump pulled the US out of the Trans-Pacific Partnership (TPP) on his second day in office, before the US Congress could vote on joining the pact, which became the CPTPP when the remaining 11 TPP countries including Canada, Japan and a number of Southeast Asian nations continued negotiating membership terms. The agreement was brought fully into force last year.

Xi said at the online Asia-Pacific Economic Cooperation (Apec) summit last month that he “will give positive consideration to the idea” of joining the CPTPP.

Long Yongtu, who helped negotiate China’s entry to the World Trade Organisation (WTO), followed up on the discussion of China’s joining CPTPP in a China conference interview broadcast earlier on Wednesday by dismissing as “groundless” claims that China would not meet the pact’s strict criteria.

The CPTPP includes long-standing objectives of US negotiators such as broad tariff elimination and largely US-crafted commitments on digital trade and state-owned enterprises (SOEs). The pact’s tariff commitments, which are based on the original agreement negotiated by Cutler, would eventually result in the elimination of duties on more than 99 per cent of product categories in most member countries.

US-China Business Council President Craig Allen called Beijing’s expressions of interest in the trade pact “a very interesting development because the CPTPP has excellent standards on technology on state-owned enterprises, on subsidies and all of these other issues”.

“The United States played a very, very large role in drafting those rules,” he said, adding that a period of negotiations by the US and China to join the group might lead to “a new level of consensus on these very, very difficult issues”.

However, Cutler and other analysts say the cards are stacked against a quick re-entry for the US government after President-elect Joseph R Biden takes office next month.

“I don’t expect in the near term the Biden administration jumping back into TPP,” Cutler said. “I think what perhaps might be more realistic is that in an effort to reengage economically in the Indo-Pacific region, that the United States perhaps puts forward a narrower negotiation either in the climate area or in the medical supply chain area or in digital trade, then to work with other countries and get some rules in place.”

Speaking in another conference on Wednesday, Kurt Campbell, the top US diplomat for East Asia during the Obama administration, also said a near-term effort by Biden to join CPTPP was unlikely.

“Both political parties have some real apprehension and concern about whether trade is appropriate, whether it can be undertaken fairly,” Reuters cited Campbell as saying in an Atlantic Council discussion.



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