On September 16, China formally applied to join the “Comprehensive and Progressive Agreement for Trans-Pacific Partnership” (CPTPP), which made the Taiwanese government – busy with the fight against the COVID pandemic – suddenly wake up, as this may be the last opportunity to apply to join the CPTPP. China has changed from its previous passive stance to an active one, and on the evening of September 22, it suddenly announced that it had submitted CPTPP application documents to New Zealand, which holds the rotating chairmanship of the partnership, and planned to issue a statement at a press conference on September 23.
China and Taiwan’s sudden applications to join the CPTPP at this time have filled the outside world with speculation about the underlying motivation, the effects on overall geostrategy, and the competition and cooperation between the CPTPP and the Regional Comprehensive Economic Partnership Agreement (RCEP).
The CPTPP is a partnership between 11 countries: Japan, Canada, Australia, New Zealand, Malaysia, Singapore, Vietnam, Brunei, Mexico, Chile, and Peru, and came into effect on December 30, 2018. The United Kingdom, having left the European Union, on January 31, 2021, formally presented a membership application to Japan, the speaker country that year, and became the first “non-sponsoring country” to formally apply for membership.
China’s attempt to break the Japan-U.S. “anti-China connection”
China is the second “non-sponsor country” to apply to join the CPTPP. On the surface, China has formally applied to join the CPTPP to demonstrate the world’s second largest economy’s ambitions in international trade. However, external analysis demonstrates that China’s domestic market does not meet the free-market economy conditions and standards required by the CPTPP. The necessary industrial reforms would face extensive internal resistance and would also impose the pain of economic recession.
The day before the announcement of China’s application to the CPTPP, the United States announced the establishment of a new security alliance with the United Kingdom and Australia in the Indo-Pacific region, AUKUS, to share advanced defense technology and intelligence. This new alliance helps Australia to obtain nuclear-powered submarines from the US and led to the cancellation of a contract for French-designed submarines worth tens of billions of dollars, which has attracted international attention.
According to external assessments, it will be difficult for other member states to consent to China’s closed domestic market and economic environment. China’s real purpose is to test the attitude of this CPTPP, initiated by Japan, towards its membership application. China has also recently had economic and trade disputes with Canada and Australia, and it may not be possible to conclude bilateral negotiations smoothly, and US President Biden’s attitude towards the Economic Cooperation Organization may provide opportunities to disrupt the “Anti-China Connection” that is being constructed by Japan and the US currently.
Taiwan’s worries about being marginalized
After China formally submitted its membership application, Taiwan’s Minister of Economic Affairs, Wang Mei-hua, stated that Taiwan will continue to conduct informal negotiations with CPTPP member states and wait for the right time to apply. Among Asian countries, Taiwan has only reached bilateral free trade agreements with New Zealand and Singapore, although it has been committed to joining the RCEP or CPTPP regional economic and trade cooperation organizations for many years. However, when discussing the issue of Taiwan’s sovereignty, China strongly opposes other countries signing any official agreement with Taiwan, so all countries have concerns about negotiating trade agreements with Taiwan.
Taiwan knows that it may be much more difficult to join the CPTPP if China has already joined. Concerned about an impending sense that Taiwan is about to be “marginalized,” the Executive Yuan, Taiwan’s government, announced on the evening of September 22 that Taiwan had already submitted its membership application to New Zealand.
John Deng, the chief negotiator of the Executive Yuan‘s Economic and Trade Negotiation Office, stated in a press conference on September 24 that Taiwan will apply using the same name as in the WTO model, the “Separated Customs Territory of Taiwan, Penghu, Kinmen, and Matsu”. If China joins first, however, there will be an obvious risk to Taiwan’s application. This is relatively obvious, but the government has always considered that the CPTPP is talking about the country’s systems, openness, and whether they comply with its content. Taiwan has a complete market economy and is a democratic country under the rule of law. The CPTPP should review different cases and not be biased.
Under the guidelines for new CPTPP members, countries that apply for membership need to obtain consent from the existing 11 member states. The next stage is consultation before joining and dealing with all bilateral concerns, via mutual negotiations. Thus, once the Council of Ministers agrees to consider Taiwan’s application for membership, a negotiation working group would be set up to enter formal negotiations. If the 11 current member countries can reach an agreement, the Council of Ministers would accept the results of the negotiations and complete the membership procedure.
Countries other than Japan may be worried about China’s “One China” policy. If Taiwan is allowed to join, this may trigger a backlash from the Chinese authorities. Therefore, such an application must be directly before, or simultaneously with, China. However, if the application to the CPTPP is under the name of the “Separated Customs Territory of Taiwan, Penghu, Kinmen, and Matsu”, following the practice in the World Trade Organization (WTO), although the dispute that Taiwan is a sovereign and independent country can be avoided, it will trigger dissatisfaction among people in Taiwan who claim that Taiwan is an independent sovereign country and support Taiwan name rectification.
Joining CPTPP is an important option for Taiwan’s pragmatic foreign trade strategy
Joining the regional economic and trade cooperation organization is an important component in Taiwan’s foreign trade strategy. There is a greater incentive to join the RCEP than the CPTPP, mainly because Taiwan’s industrial and foreign trade structure is largely dominated by China, Japan, and Southeast Asian countries. Even excluding India, the RCEP includes China, the world’s second largest economy, and Japan, the third largest. The RCEP15 has a total GDP of about US$ 24.4 trillion, covers about 30% of the world’s population, and carries out 28% of total global trade.
The CPTPP is not a top priority for Taiwan’s foreign trade strategy. Before 2016, the Taiwanese Ma Ying-jeou administration waited for China to show goodwill, hoping Taiwan could join the RCEP with China’s assistance after the RCEP was concluded. However, although 15 RCEP members formally signed the agreement on November 15, 2020, Taiwan still cannot join the RCEP as it would like to.
Against a background of China’s growing influence in the Asia-Pacific and worldwide, the Tsai Ing-wen administration actively promoted the “Taiwan-U.S.” and “Taiwan-Japan” bilateral free trade agreement (FTA), ignoring the CPTPP’s huge US$ 10.6 trillion, which accounts for 13.3% of global GDP. It has a total population of about 500 million, roughly 7% of the world’s population, and its trade value accounts for more than 24% of Taiwan’s total trade value. In 2016, CPTPP members accounted for 25.25% of Taiwan’s total trade. Four of these members, namely Japan, Singapore, Malaysia, and Vietnam, are among Taiwan’s top ten trading partners.
The Japanese government welcomes Taiwan to join the CPTPP
Taiwan has almost completed most of the amendments needed to comply with TPP regulations before joining, which involves transforming various domestic trade systems and revising and amending intellectual property laws and regulations. The CPTPP is looser than the original TPP standard and easier for Taiwan’s export-oriented Taiwan industry to adapt to while meeting the standard is also easier. If Taiwan can join the CPTPP, it will benefit its export-oriented manufacturing industry by allowing it to expand its market. On the other hand, agricultural and livestock products from Australia and Canada may have an impact on Taiwan’s agricultural sector.
The current international atmosphere and geo-strategic situation are increasingly favorable to Taiwan. With China’s current diplomatic stance and coercive economic measures, the world’s democracies are reviewing their positions, and in the context of economic security and a range of risks, coupled with the inability to completely separate politics and economics, Taiwan’s value within the democratic and free supply chain has been highlighted.
Japan’s Kyodo News Agency reported that the Japanese Minister of Foreign Affairs Toshimitsu Motegi, who was visiting New York, September 23 responded to Taiwan’s official submission of an application to join the CPTPP by telling the media, “We welcome this application, we will respond from a strategic point of view and the will of the people.” Considering the current conflict between authoritarianism and democracy, in which Japan, Taiwan, and South Korea are all facing fierce competition, the wisest course for the Japanese government would be to draw Taiwan into its camp.
Uncertain factors in lifting the ban on food from Fukushima, Japan
CPTPP membership and lifting the ban on food from Fukushima [imposed after that city’s nuclear disaster in 2011], will be key elements of Taiwan-Japan economic and trade negotiations. At a press conference on September 24, John Deng said, “We know Japan is very concerned about the food issue in Fukushima. After applying, we will consult and negotiate with other countries. If Japan raises this issue, it will need to be faced and dealt with.” However, he continued, “The government’s three important principles for handling food from Fukushima are national health, scientific grounds, and international norms”. He believes that “through the negotiation process, we can find the right way to deal with this issue with the Japanese side. “
Food from Fukushima is neither “nuclear-contaminated food” nor “nuclear food.” No country allows nuclear food to be sold or exported to any other country. Nowadays, with highly advanced science and technology, it is very easy to check if items are contaminated by radiation. John Deng admitted that “this problem is not easy to deal with. Every country regards maintaining national health as an important policy goal, and Taiwan will uphold this principle when dealing with the problem of imported food.”
The US announced on September 21 that it would allow imports of food from Fukushima and elsewhere. John Deng said: “It seems the United States must have carried out scientific investigations, it may be correct that these previously regulated projects should be properly handled, and it should be properly determined that they are not contaminated by nuclear radiation, so measures can be loosened further. “These can all be used as reference points when negotiating with Japan.
Will the U.S. also try to join the CPTPP?
Former President Trump did not think participating in the regional economic cooperation organization was in the United States’ national interests, but President Biden may want to consider it. The US withdrawal from Afghanistan implies a simultaneously greater focus on the Asia-Pacific region. Might it take this opportunity to investigate joining the CPTPP? Although the content and standards of the CPTPP are different from the earlier TPP, it does not conform to the USA’s original intention to emphasize high national interests of the intellectual property rights standards throughout the service industry. However, if China, the second largest economy, joins, then combined with Japan, the third largest economy, their overall size is great than the United States. Will the US support the regional economic cooperation organization initiated by Japan to compete with the RCEP, which is also dominated by ASEAN and China in the Asia-Pacific region?