Two key questions to watch

China’s heightened interest in the CPTPP raises two important questions, one for its current members and one for its prominent former member, the US.

Current CPTPP members will have to reflect deeply on the implications of China’s accession on the structural integrity of the agreement, especially in those cutting-edge chapters where China will almost certainly define-down implementation. The CPTPP was originally conceived as the “gold standard” free trade agreement. It aspired to push the envelope in establishing rules and disciplines in new trade areas where the WTO had demonstrated it was not up to the task. By charting new ground in areas like e-commerce and state-owned enterprises, CPTPP members had hoped to bring trade governance into the 21st century. Is that groundbreaking vision compatible with China’s membership?

For the US, the question is whether China’s interest shifts the timetable on considering a possible re-entry into the CPTPP. The Biden administration came into office focused on Covid-19 and infrastructure. There was no intention to even consider major trade initiatives until much later in the term. But events have a habit of reconfiguring carefully laid out Presidential agendas.

A US reentry would not necessarily be an easy lift though, as the US would seek renegotiation of certain provisions. That may or may not be acceptable to other CPTPP members. And the politics of Congressional ratification would be an open question, especially with midterm elections looming next year. But could the US stay on the sidelines if China moved towards CPTPP membership?

Keep a close eye on these two questions. The manner in which they are framed and resolved will tell us a lot about how trade dynamics in East Asia are likely to unfold over the next three to five years.