How to make China and Taiwan earn their admission to CPTPP
Solution to this puzzle lies in the details
Ambassador Kurt Tong is a former U.S. diplomat. He is a partner at the Asia Group.
After China's Sept. 16 application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Washington faces the supreme irony of watching passively as its primary strategic rival becomes a beneficiary of a regional market-opening arrangement that the United States crafted for its own benefit.
With both American political parties indulging the populist view that fostering globalization is bad policy, the probability of President Joe Biden plotting a return to CPTPP is close to zero. Indeed, any White House effort to seek Congressional support in engaging on CPTPP would likely end in disaster.
The more important question now is how the eleven actual members of CPTPP, with Japan being the most powerful in the group, handle the dual applications to join the pact coming from China and Taiwan.
China is the world's second-largest market and plays a huge role in the Indo-Pacific regional economy. But Taiwan, which registered its formal interest just days after Beijing, has economic regulations and business practices that are much closer to the standards required by CPTPP. The situation is made even more complicated by the two candidates' seven-decade-long struggle over sovereignty.
As noted in the article "Can the CPTPP change China, or will China change it?" by Nikkei commentator Hiroyuki Akita published online on Oct. 30, experts in the region are divided on how to juggle these two quite different applications. Some favor taking China's bid seriously, given the possibility of significant benefit for the Indo-Pacific economies if China can truly meet CPTPP standards.
Others want to focus on keeping China out, because they believe that CPTPP membership would do too much to enhance Beijing's regional power, and they doubt the sincerity of China's willingness to reform its economy enough to meet CPTPP standards. Meanwhile, among the CPTPP members, most of the voices speaking out thus far to support Taiwan's candidacy are coming from Japan.
I believe the solution to this puzzle lies in the details. If the CPTPP members consider and negotiate the China and Taiwan candidacies separately, it would create a narrow playing field where China can strong-arm CPTPP members one-by-one into making substantive concessions.
Such a setup would enable China to loosen the CPTPP rules, and win a variety of exceptions and extensions, thereby allowing it to join the CPTPP without making the once-in-a-generation changes to its economy that should be the price of joining the club. At the same time, China would be able to push those same counterparts, via bilateral diplomacy, to stall Taiwan's candidacy.
Rather than deal with them separately, I believe the CPTPP members should consider the China and Taiwan applications together, at the same negotiating table, and thus force the two to compete substantively for admission.
Such a combined and competitive process will yield better results, as both candidates would be asked in the same forum to meet tough CPTPP requirements that China, in particular, would find daunting -- including disciplines such as rules on state-owned enterprises, labor unions, environmental standards, access for foreign investors, intellectual property rights protection, digital economy rules and currency convertibility.
This kind of judo move by the CPTPP partners will use the energy of China's application to force it to either reform its economy, or retreat in embarrassment from the CPTPP dojo.
The other smart move that Japan and the other CPTPP members should make, right now, is to actively solicit more candidates to join the same round of upcoming CPTPP negotiating sessions, sitting and competing together with China and Taiwan.
The United Kingdom and South Korea are both known to be highly interested in the CPTPP, and they have large and capable market-based economies. Adding those partners, and perhaps others such as the Philippines, will help bolster CPTPP's emphasis on high standards and lead to even greater economic benefit at the end of the process.
Tokyo can do much to improve its troubled relations with Seoul by reaching out and actively encouraging South Korea to apply to join CPTPP -- without asking for any non-CPTPP-related quid pro quo from Seoul.
Meanwhile, given Tokyo's close friendship with London, the Japanese government is best positioned among the CPTPP partners to approach Boris Johnson's government and encourage a CPTPP application by the United Kingdom in the immediate future.
As for the United States, although Tokyo can and should consult with Washington on the matter, the Japanese government needs to realize that it cannot count on the United States -- a non-CPTPP member -- to help very much in dealing with the China-Taiwan CPTPP conundrum. Japan will have to forge a path forward using its own endowments, while bringing along like-minded partner support from within the CPTPP membership.
The upcoming Nov 12 gathering of the leaders of the Asia-Pacific Economic Cooperation (APEC) is a suitable opportunity to work on this agenda, even via videoconference. The announced Nov. 15 visit to Tokyo of U.S. Trade Representative Katherine Tai will be yet another useful chance to devise good strategies.