Taiwan follows China in attempt to join Trans-Pacific Trade Pact

Updates to the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership

Taiwan applied to join a major Trans-Pacific Trade Pact just a week after China submitted its own membership application, pitting the two opponents against each other in a race for membership.

Taiwan’s formal request to join the Comprehensive and Progressive Agreement on Trans-Pacific Partnership (CPTPP) will force other members of the pact to engage in a delicate political balancing act.

“We submitted the formal request this afternoon,” an official in Taiwan’s presidential office told the Financial Times on Wednesday.

A senior Taiwanese trade policy official confirmed that the request had been sent to New Zealand’s Ministry of Foreign Affairs and Trade, which processes applications for membership in the CPTPP. A ministry spokesperson said the request would be shared with other signatories to the trade deal before a decision was made on “whether or not to initiate membership processes.”

The almost simultaneous demands from China and Taiwan create more rivalry at a time of great tension between the two. Beijing claims Taiwan as part of its territory and threatens to invade it if Taiwan indefinitely refuses unification.

The Chinese government frequently puts pressure on third countries as well as international organizations, non-governmental organizations and business enterprises to help isolate Taipei and deny it full participation in international affairs.

Trade experts from Taiwan and Japan said that while China’s and Taiwan’s membership in the World Trade Organization was a precedent for the two countries participating in a trade deal, the power and political assertion of Beijing were now much larger, making a CPTPP deal for both more politically complex.

China and Taiwan joined the WTO one month apart in 2001 and 2002.

In recent years, China has frequently used its economic might to “punish” other countries, including Australia and South Korea, for political decisions it dislikes, with sudden bans on some imports. from these countries or a suspension of Chinese tourism.

Rival offers from Beijing and Taipei to join CPTPP will cause trade group members to fear that a failure to quickly agree to China’s membership or a decision to allow Taiwan first could trigger further economic coercion on the part from Beijing.

The CPTPP was originally designed by the United States to limit Beijing’s growing influence in the region, and was revived at the initiative of Japan after the abandonment of the United States. Under its rules, all existing members have a veto right over new members.

Ahead of Taiwan’s candidacy, Charles Finny, a former New Zealand diplomat and trade negotiator, expected Beijing’s sudden decision to join the CPTPP would likely spur Taipei into action.

“Taiwan must be a member before or at the same time as China. I don’t see the Taiwanese taking the risk that China will be able to veto any Taiwanese candidacy, ”said Finny, who has negotiated free trade agreements with Beijing and Taipei.

Trade experts have also previously noted that Taiwan has shown it meets the necessary standards under its free trade agreements with Singapore and New Zealand, which are founding members of the CPTPP.

Taiwan has wanted to join the CPTPP for years and has completed most of the legal preparations necessary to deregulate the country’s markets to meet the standards of the pact. However, Taipei had taken its time with the formal request as it had not completed informal consultations with club members.

Japan, which has the rotating CPTPP presidency this year, urged Taipei to conclude its preparatory talks and apply before the presidency moves to Singapore in January.

A Japanese diplomat involved in the matter told the FT this month that Tokyo feared Taipei would lose any chance of joining the regional trade grouping once China joined it.

China’s official decision to join the CPTPP last week took its members and Taiwan by surprise. Although Beijing has previously publicly expressed interest in joining the trade club and started pressuring some members for their support in the past two months, it has not held detailed consultations.

The dominant role of state-owned enterprises in the Chinese economy, in particular, is seen as an obstacle to the country’s membership in the CPTPP.

The New Zealand Ministry of Foreign Affairs and Trade did not immediately respond to a request for comment.

The Taiwanese government is expected to announce its decision later on Wednesday, once it informs the other 11 CPTPP members of its candidacy.

Additional reporting by Kana Inagaki in Tokyo

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