On September 16, China formally submitted a request to accede to the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) trade agreement. This was not surprising news, but it was still big news. The CPTPP is the survivor to the American exit from the original Trans-Pacific Partnership (TPP) at the behest of former U.S. President Donald Trump. The reconfigured trade grouping retained the ambitious targets for tariff elimination and high standards on trade and investment liberalization. From its inception, the TPP project has anticipated welcoming new members both to increase its economic heft and to disseminate quality rules for economic integration. Acceptance of the CPTPP’s extant disciplines is required of all prospective members.
China has been sending signals of interest in joining the trade agreement for a while, and at the last Asia-Pacific Economic Cooperation Summit meeting, Chinese President Xi Jinping announced that China will “favorably consider joining” CPTPP. The formal accession bid is a masterful stroke for Chinese diplomacy, even if the intended outcome of membership is far from assured.
Entry into CPTPP would consolidate China’s economic integration drive, building from its joining the Regional Comprehensive Economic Partnership (RCEP) trade agreement; its state-sponsored Belt and Road Initiative; and the Chinese-led Asian Infrastructure Investment Bank. The CPTPP would be a particularly valuable feather in China’s cap as champion of economic globalization. It would reverse the persistent narrative of economic decoupling, as China would appear more centrally integrated to the world economy with an ambitious trade agreement under its belt, whilst the United States looks from the outside in, marginalized from the CPTPP of its own volition.
Some observers feel good about the prospects of China acceding to CPTPP. They argue that China is closer to CPTPP standards than usually acknowledged, that the flexibilities built into the text of the agreement will enable China to join even in areas where domestic reform is hard, and that the existing CPTPP members have a strong interest in deepening trade and investment relations with an economic giant like China.
Such optimism may be misplaced, however. There is a wide gap between core CPTPP standards and China’s extant commitments in other trade agreements. The CPTPP has chapters on labor and state-owned enterprises mandating freedom of association, eliminating all forms of forced labor, and establishing disciplines on the commercial activities of public enterprises; RCEP does not. Both the CPTPP and RCEP contain a chapter on e-commerce, but the commitments undertaken are very different. It is not just that the digital provisions of the CPTPP go further (for example, forbidding forced disclosure of source code), but that they are subject to dispute settlement amongst the parties and do not invoke self-judging national security exemptions.
In assessing China’s readiness to play by the CPTPP rulebook, the direction of travel matters. Under Xi, China has moved further away from the spirit of the CPTPP on labor rights protection, a level-playing field for private enterprises, and freedom of data flows. Instead, China’s repression of Uyghurs, the heavy subsidization of high-tech industry, and its tightened data localization requirements under the new Data Security Law have been a source of concern for its trading partners — including many CPTPP members. Scale ought to be considered. Vietnam, a CPTPP founding member with heavy state presence in the economy, received several exemptions for its state-owned enterprises (SOE). However, China’s mammoth size is bound to make many CPTPP members wary of extending similar flexibilities. In fact, countries like Japan have been working with others to tighten World Trade Organization (WTO) subsidy rules with China in mind. An easy waiver for multiple Chinese SOEs appears unlikely.
