Divisive China, Taiwan bids to join Pacific trade pact in focus at meet

By Lucy Craymer

WELLINGTON (Reuters) – Members of a major trans-Pacific trade pact meeting in Auckland on Sunday are set to discuss applications by China and Taiwan to join the group, proposals that have deepened the rancour among the neighbours and divided the opinions of member-nations.

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is also expected to finalise Britain’s membership at the gathering.

China beat Taiwan to apply to join the group by less that a week in 2021, but both applications have been on hold while the UK application has been worked through.

“This is probably the first time there is going to be very serious engagement about what to do about the new applications,” said Charles Finny, a former trade and foreign affairs diplomat for New Zealand who led the country’s negotiations for a trade agreement with Taiwan.

“There is no consensus on that,” he said.

CPTPP is a landmark trade pact agreed in 2018 between 11 countries – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Britain will become the 12th member to join the pact that cuts trade barriers, as it looks to deepen ties in the Pacific.

In support of its application, Britain has said that CPTPP countries will have a combined GDP of 11 trillion pounds ($13.6 trillion) once Britain joins, or 15% of global GDP.

Ministers from the group are expected to discuss a range of topics including adding new members. It is uncertain that an agreement will be made.

Costa Rica, Uruguay, Ecuador, and most recently Ukraine, have also applied to join the partnership.

China has opposed Taiwan’s application and raised its own bid with the host nation during New Zealand Prime Minister Chris Hipkins’ visit to China last month.

“At present, China is communicating and consulting with members in accordance with the procedure of joining the CPTPP,” China’s commerce ministry spokesperson Shu Jueting told a press conference in Beijing on Thursday.

HURDLES FOR CHINA

Some member countries support reviewing applications on a first come first served basis, which would put China first, while others want to focus on the best application.

“New Zealand and others were supporting applications being reviewed simultaneously albeit at potentially different speeds depending on their ability to meet the high standards, rather than as they came in,” a source close to the matter told Reuters.

This would avoid having to pick China or Taiwan or ignore them both.

“The CPTPP is an agreement of very high standards,” Australia’s Foreign Minister Penny Wong told reporters in Jakarta on Friday when asked about the upcoming meeting.

“All countries who are the original members of the CPTPP would expect those high standards to be able to be met by any country seeking to join,” she said.

For China the hurdle is significant. The CPTPP requires countries to eliminate or reduce tariffs, make strong commitments to opening services and investment markets and then there are rules around competition, intellectual property rights and protections for foreign companies.

“There are both economic and political complexities,” said Aidan Arasasingham, a research associate at the Centre for Strategic and International Studies in Washington DC.

“There’s a large gap between the high standards and binding commitments that are demanded of CPTPP members, and where China is currently at,” he added.

Revision should be on merit not on dates, said Joanne Ou, Taiwan’s de facto ambassador to New Zealand.

“That’s the most transparent and fair way to review them,” she said. Taiwan deputy foreign minister Roy Lee told reporters in Taipei last week that Taiwan “totally” meets the criteria for entry into CPTPP but there are “political issues” which need to be addressed first, he said, without elaborating.

The other countries’ applications also provide opportunities.

Mary Ng, Canada’s minister of small business, export promotion and international trade said Canada was supporting Ukraine’s application.

“After modernising the Canada-Ukraine FTA this year, Canada knows that Ukraine is capable of meeting the high standards of the CPTPP,” she said.

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