The waiting room for the Comprehensive and Progressive Agreement for Trans-Pacific Partnership was crowded even before South Korea knocked on the door last week. Seoul will join China and Taiwan in seeking membership of the eleven-nation trade bloc, while the UK is a little further along, having already begun accession negotiations. For Seoul, it is a bold step towards multilateralism and adds to CPTPP’s momentum as a big success story for the international trade system.
But the applications create a series of geopolitical dilemmas for the membership. Would admitting China extend Beijing’s influence at the expense of Washington? Can Taiwan be allowed to join if China is not? And can the membership look past tense bilateral relationships, such as Tokyo’s unfriendly dealings with Seoul, to allow new members into the club? The best approach is to go back to the one thing every country in Asia agrees on — the benefits of greater trade — and assess the candidates on their merits. In doing so, the questions will answer themselves.
For many years, the original TPP was driven by the US, which regarded the deal as its vehicle to update the rules for economic governance. During the Obama administration, Washington negotiated the text with the other 11 members: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. TPP was designed as a “high-quality” agreement, with strong rules on investment, intellectual property and labour standards, as well as tariffs.
The parties reached a deal in October 2015. But when the US elected Donald Trump as president the following year, he made withdrawal one of his first acts. After a renegotiation, in which certain US priorities such as pharmaceutical patent rights were thrown overboard, the remaining 11 countries brought the now CPTPP into force. The resulting deal very much resembles the original US vision: a highly liberalising trade pact that sets high standards. If Beijing, London, Seoul and Taipei are willing to meet those standards, existing members should welcome them on board.
That condition is important. As part of the accession process, applicants need to lay out how they comply with the rules. A natural response to Beijing’s request for membership, therefore, is to ask it to do so. For example, the CPTPP has strict rules on state-owned enterprises, so the members will want details on the extent of government control and support at various Chinese companies. Canberra will, naturally, want to know how Beijing’s punitive duties on its beef, barley and wine comply with the rules.
If Beijing does want to comply, and can demonstrate its sustained appetite to live by CPTPP principles, that would be a step forward for the global trading system. If not, as seems more probable, then China should not be admitted.
With Seoul and Taipei, by contrast, the hurdles are not as high. Both have to accept compromises on agriculture and fisheries. Members such as Tokyo will be within their rights to raise all trading problems, such as bans on food imports from Fukushima because of the prefecture’s 2011 nuclear accident. By contrast, it would not be legitimate for Tokyo to block Korea because of disputes over wartime history.
In Europe and the US, trade has become politicised — seen as a matter of sovereignty, or as a threat to workers’ wages. Asia is more pragmatic. Last year, it agreed to another regional trading pact, the Regional Comprehensive Economic Partnership. To let geopolitics shape CPTPP would be a mistake. Rather, the standards in the accord were intended to shape geopolitics. Apply them and let them do their work.
Source: Economy - ft.com
