With the UK set to become the Pacific trade deal's newest member, attention now turns to those next in line – and with China and Taiwan vying to join, New Zealand and other members will face some tough discussions in the coming months
If news last week that the United Kingdom is all but set to become the Comprehensive and Progressive Agreement for Trans-Pacific Partnership's (CPTPP) newest member attracted muted headlines in New Zealand, it was for entirely understandable reasons.
The UK’s agreement to join the trade bloc – pending ratification by the 11 current members and the British parliament itself – comes after almost two years of negotiations, and was hailed by Trade and Export Growth Minister Damien O’Connor as “another demonstration of our commitment to the rules-based trading system”.
But with New Zealand and the UK having already put pen to paper on a bilateral free trade deal with surprisingly generous concessions for Kiwi agriculture exporters, there will be little in the way of additional economic benefit; it was telling that O’Connor focused on the symbolic value of “bringing the Atlantic to the Indo-Pacific” and showing the appeal of the CPTPP.
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The real rewards could come from less familiar nations who seek to join the trading bloc, such as Ecuador, Costa Rica and Uruguay - all of whom have lodged requests for membership, and none of whom have free trade deals with New Zealand.
But as the Government prepares to host a CPTPP Commission meeting in July as part of its year as commission chair, it is two partners at the front of the queue - China and Taiwan - who will get the most attention.
Both nations lodged official applications to join the trade bloc in September 2021, with China outpacing Taiwan by less than a week.
With cross-strait tensions showing no signs of receding as Taiwan’s president Tsai Ing-wen heads to the United States for political meetings this week despite threats from Beijing, the decision as to how to handle the rival membership bids will likely prove fraught.
Having been next in line after the UK, China may argue its application deserves to be considered and decided before any others.
Yet there are obvious difficulties for Beijing in meeting some of the more rigorous standards contained in the CPTPP, such as those related to labour and the environment as well as the liberalisation of state-owned enterprises.
It is also unclear the country would receive the unanimous endorsement required to join a bloc that operates by consensus.
In October last year, Australian trade minister Don Farrell said he saw no prospect of China being accepted given its trade retaliation against the country. Former British prime minister Liz Truss has called on her country to oppose any Chinese proposal to enter the CPTPP, describing the bloc as “an important counterweight to those who seek to undermine our values”.
However, those concerns are far from universal within the CPTPP’s membership, with the Australian Financial Review last year reporting signs of support for the Chinese bid from Singapore, Malaysia and Vietnam.
A potential stalemate
Taiwan would in theory find it easier to meet the criteria contained within the CPTPP deal, but choosing to allow it in while shutting China out would almost certainly attract a strong reaction from Beijing.
Asked last week about the possibility of Taiwan joining the CPTPP, a Chinese foreign ministry spokeswoman said the country would “firmly oppose any official interaction between countries and the Taiwan region … [and its] accession to any agreement or organisation of official nature”.
“There is only one China in the world, and the Taiwan region is an inalienable part of China. The one-China principle is a universally recognised norm in international relations and a prevailing consensus among the international community.”
Multilateral organisations have found workarounds to these sensitivities in the past, most notably when China joined the World Trade Organisation in December 2001, followed by Taiwan (as the customs territory of Chinese Taipei) the following month in a seeming quid pro quo.
But Chinese officials have already dismissed the suggestion that the WTO should serve as a precedent, and the heated nature of the present China-Taiwan relationship makes any compromise unlikely. That could amount to an effective stalemate, with neither party able to join the CPTPP.
The question then would be whether the current members could put China and Taiwan to one side and focus on other nations with less politically contentious accession procedures, or whether that stalemate would gum up the works for everyone else until resolved.
Holding FTAs with China and Taiwan, and being broadly trusted when it comes to the global trading order, New Zealand could be well placed to find a path through if such an outcome is possible.
But given the complexities at play, and the time taken to approve the UK’s membership, it would be little surprise if Kiwi diplomats were to end our year in the CPTPP chair with the issue unresolved.
