China will likely fail in its CPTPP bid — but it’s a ‘smart’ move against the U.S. - analysts

CNBC reports that analysts said that China will likely fail in its bid to join the Comprehensive and Progressive Trans-Pacific Partnership — but its move to submit an application highlighted the lack of U.S. economic policy in Asia-Pacific.

President Barack Obama had negotiated the TPP to deepen U.S. economic engagement in Asia-Pacific and counter China’s growing influence in the region.

All 11 signatories of the CPTPP must agree to China’s request to join before it can be admitted as a member. 

Beijing’s strained diplomatic relations with some member countries would hurt its chances, said analysts. China will also likely face difficulties in meeting the trade pact’s demands for a level-playing field in many aspects of the economy, they added.

China is not the only one that’s applied to join the CPTPP; the U.K. and Taiwan have done the same.

U.S. allies in the CPTPP such as Australia, Canada and Japan increasingly view China as a “strategic threat,” and they could block China’s application, said analysts from risk consultancy Eurasia Group.

Meanwhile, Canada and Mexico could stand in China’s way through the United States-Mexico-Canada Agreement or USMCA. The trade deal contains a “poison pill” provision requiring any of the three members to consult the others if it wishes to pursue a trade deal with a “non-market country.”

Many analysts said the clause could have been aimed at China. USMCA was negotiated by the Trump administration and replaces the North American Free Trade Agreement or NAFTA.

In addition to political hurdles, China may have difficulties meeting CPTPP provisions that promote cross-border data flows, labor and environmental protection, as well as restrictions on state-owned companies, said analysts.