In October 2015, former U.S. president Barack Obama announced the successful conclusion of the Trans-Pacific Partnership (TPP) negotiations saying “we can’t let countries like China write the rules of the global economy... We should write those rules, opening new markets to American products while setting high standards for protecting workers and preserving our environment.”
Yet less than two years later, in his first full week as president, Donald Trump removed the U.S. from the pact saying “we’re going to stop the ridiculous trade deals that have taken everybody out of our country and taken companies out of our country, and it’s going to be reversed.”
That the TPP, now renamed the Comprehensive Progressive Trans-Pacific Partnership (CPTPP), soldiered on without the U.S. shows the importance of the fast-growing Asia Pacific, and the need to ensure the rules of global trade are being shaped by countries that embrace a rules-based system. That it was also to be a useful geopolitical tool to counter a fast-rising China was always understood to be a major objective beyond removing tariff and non-tariff barriers.
Yet once again, the CPTPP is drawing major attention for one main reason: several countries want to join what is fast becoming the trendiest trade pact out there.
For example, Liz Truss, the U.K. government’s International Trade Secretary has for months expressed hope the U.K. might join the pact even though it is not a pacific country. And lately, she has stated bluntly it is the U.K.’s most important post-Brexit trade priority and that it hopes to join by the end of next year.
Further adding to the intrigue is that just last month, China’s Commerce Minister Wang Wentao, submitted China's application to join the CPTPP in a letter to New Zealand's trade minister, Damien O'Connor. As the Secretariat of the pact, New Zealand handles the administrative processes required for potential new members.
And Taiwan has also indicated it wants to join which was quickly welcomed by Japan which will make things very interesting in the months ahead given Japan has already expressed skepticism China can meet the high standards of the pact.
This is a fair point indeed. Few believe China can be expected to adhere to robust chapters on issues related to labour rights, the environment and intellectual property. And we haven’t even begun to unpack the chapter related to State-Owned Enterprises.
Given all current members must approve new members, there are no guarantees for any of the would-be entrants.
But 6 years ago when President Obama heralded a new era for global trade in the Asia-Pacific, no one predicted the U.K. would be chomping at the bit to join. And China’s interest in joining would be have viewed as a punchline.
Indeed, it’s going to be interesting to watch.