China is applying to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) – just days after the US, UK and Australia formed a defensive pact to counter Chinese influence in Asia.
China submitted its application to CPTPP member New Zealand, which administers membership, yesterday.
The BBC reports that Chinese commerce minister Wang Wentao then held a telephone conference with New Zealand trade minister Damien O’Connor to discuss the next steps.
Adding to RCEP
Joining the CPTPP would be an further achievement for China, which signed up to the 14-country Regional Comprehensive Economic Partnership (RCEP) free trade agreement in November, as reported in the IOE&IT Daily Update.
RCEP is the world’s largest trading bloc, including South Korea, China, Japan, Australia and New Zealand. Its member have a population of 2.2 billion and account for 30% of global economic output.
China’s move is certain to spark a reaction from the US, Aljazeera reports.
Bulwark against China
The forerunner of the CPTPP, the Trans-Pacific Partnership (TPP) was established in 2016 by president Barack Obama as an economic bloc to counterbalance China’s growing power.
However, Donald Trump pulled the US out of the arrangement in 2017, and the CPTPP was reformulated with Japan leading.
Behind the scenes talks have been going on for months as China seeks to follow the UK to become the next country to join the 11-nation trade bloc. The UK submitted its application in January.
Membership not guaranteed
Negotiations will not be straightforward. The Aukus defensive partnership of Australia, the UK and the US announced this week, has been denounced by China as “promoting war and destruction” reports Reuters.
China is also currently involved in a trade war with Australia, which is a CPTPP member. As previously noted in the IOE&IT Daily Update, all 11 members of the bloc have to agree to new members.
China is also involved in a dispute with Canada, which is another CPTPP member, over the imprisonment of Canadian citizens accused of spying, Reuters reports.
Tariffs eased
In a sign that China is looking to calm its trade wars with the US, Global Times reports that it has extended tariff exemptions for 81 products imported from the US by seven months.
Goods on the list include food, lubricating oil, timber, publications, mechanic devices for agriculture and medicines.
The tariffs date back to Donald Trump’s tit-for-tat trade wars with China which saw the US levy $360bn of tariffs on the world’s second largest economy.
China is keen to end the tariff wars but according to the FT, the US could introduce a new round of section 301 tariffs.
US officials are debating whether to open an investigation into China’s use of industrial subsidies with the Biden administration frustrated at what it sees as China’s continued use of unfair practices.
