Evaluate Asian trade bloc candidates on their merits
The Comprehensive and Progressive Agreement on Trans-Pacific Partnership waiting room was packed even before South Korea knocked on the door last week. Seoul will join China and Taiwan in seeking membership in the eleven-nation trade bloc, while the UK is a little further along, having already started membership negotiations. For Seoul, this is a bold step towards multilateralism and adds to the momentum of the CPTPP as a great achievement for the international trading system.
But the nominations create a series of geopolitical dilemmas for members. Would admitting China extend Beijing’s influence to Washington’s detriment? Can Taiwan be allowed to join if China is not? And can members look beyond strained bilateral ties, such as Tokyo’s hostile relationship with Seoul, to allow new members to enter the club? The best approach is to go back to the one thing all Asian countries agree on – the benefits of increased trade – and assess candidates on their merits. In doing so, the questions will answer on their own.
For many years, the initial TPP was led by the United States, which viewed the agreement as their vehicle for updating the rules of economic governance. Under the Obama administration, Washington negotiated the text with the 11 other members: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The TPP was designed as a “high quality” agreement, with strict rules on investment, intellectual property and labor standards, as well as tariffs.
The parties reached an agreement in October 2015. But when the United States elected Donald Trump as president the following year, he made withdrawal one of his first acts. After a renegotiation, during which some US priorities such as pharmaceutical patent rights were thrown overboard, the remaining 11 countries put the CPTPP into effect. The resulting deal looks a lot like the original US vision: a heavily liberalized trade pact that sets high standards. If Beijing, London, Seoul and Taipei are willing to meet these standards, existing members should welcome them on board.
This condition is important. As part of the membership process, applicants are required to explain how they are complying with the rules. A natural response to Beijing’s request for membership is therefore to ask it to do so. For example, the CPTPP has strict rules on state-owned enterprises, so members will want details on the extent of government control and support in various Chinese enterprises. Canberra will, of course, want to know how Beijing’s punitive tariffs on its beef, barley and wine fit the rules.
If Beijing is to comply and can demonstrate its sustained appetite to live by the CPTPP principles, that would be a step forward for the world trading system. Otherwise, as seems more likely, China should not be admitted.
With Seoul and Taipei, on the other hand, the obstacles are not as high. Both must accept compromises on agriculture and fishing. Members such as Tokyo will have the right to raise all trade issues, such as food import bans from Fukushima due to the prefecture’s nuclear accident in 2011. On the other hand, it would not be legitimate for Tokyo blocks Korea due to disputes over the history of the war.
In Europe and the United States, trade has become politicized – seen as a matter of sovereignty or as a threat to workers’ wages. Asia is more pragmatic. Last year, he concluded another regional trade pact, the Regional Comprehensive Economic Partnership. To let geopolitics shape the CPTPP would be a mistake. Rather, the norms of the accord were intended to shape geopolitics. Apply them and let them do their job.