China’s Bid to Join the CPTPP Will Likely Fail
China has been chastised for cracking down on labor unions and subsidizing state-owned businesses, making it difficult for the country to join the CCPTT. Come check out our article to learn more!
China has applied to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), a trade pact formed in 2018 with 11 members. However, experts predict its bid will fail, although China’s move to apply highlights the US’s need to reevaluate its lack of coherent economic strategies in the Asia-Pacific region. Because of enormous potentials from CPTT, the Asian country is likely missing out on valuable trade links.
From the TPP to the CPTPP
The CPTPP was established in 2018 after former US President Trump withdrew the country from the Trans-Pacific Partnership (TPP), a trade deal secured by former President Obama to strengthen the US’s economic relationship with Asia-Pacific nations. The trade pact includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.
To gain membership into the CPTPP, China will need approval from all 11 members. This qualification presents the first potential hurdle to China succeeding in its bid, given that it has strained relationships with some member countries.
Additionally, Beijing will likely have trouble meeting the trade requirements regarding its labor rights and cross-border data flows.
Major Obstacles for China
Given the Chinese Communist Party’s tight state control, some of the CPTPP’s requirements will prove unfeasible for the country to satisfy. For example, the CPTPP demands a higher standard for workers’ rights. Vietnam, which recently gained membership with the CPTPP, had to overhaul its labor work code to align with CPTPP’s regulations.
Moreover, the Southeast country had to give workers rights to form independent unions for the first time. It is unlikely that China will be happy to do the same, especially with a history of relentless crackdowns on its independent labor organizations. Similarly, the CPTPP has some strict rules around subsidies to state-owned enterprises and the “free flow” of data, forcing China to undergo significant reformation to meet these requirements.
Plenty of Economic Benefits in CPTTP
Even if China fails to join the CPTPP, the trade deal stands to become a powerhouse of global trade. The UK has also made steps towards joining the agreement, as has Indonesia, the Philippines, South Korea, and Thailand.
On the other hand, the US has not made any moves to become involved in the trade deal. Although there hasn’t been any signal from this economic giant, some analysts believed that straightening economic relations with Asia-Pacific may become an important aspect under Biden’s presidency. Thus, this silence might highlight the lack of US economic policy in this region.
With great economic potentials, long-standing relationships with CPTTPP members are beneficial for any country’s bilateral trade, and the China CPTTP plan seems ambiguous at the moment.
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