context: Following scholars’ calls for China to join CPTPP, CASS’ latest feasibility study detailing specific provisions makes an even stronger case for China’s entry. The compliance difficulty of various provisions, however, points to a hard and long negotiation process even if the government decided to join.

Although some demanding provisions are removed from the original TPP text to make it easier to reach a deal, Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is still one of the most advanced trade treaties in the world, and its standards are posing challenges for China’s entry, notes Bai Jie 白洁 CASS postdoctoral scholar and Su Qingyi 苏庆义 CASS researcher.

Provisions that are difficult for China to comply with

  • national treatment and market access for goods
    • tariffs are removed for more than 80 percent of goods traded among most CPTPP members, while only 57.02 percent of goods are traded at zero tariff under China’s most liberalised free-trade agreement (FTA) (with South Korea)
  • sanitary and phytosanitary measures (SPS)
    • China’s SPS rules are lagging behind international level in terms of scientific standards, transparency, discipline and post-market surveillance
  • cross-border trade in services
    • China still imposes strong restrictions on market access to many service sectors
  • temporary entry for business persons
    • China has been cautious about the movement of natural persons, and its access commitment made under General Agreement on Trade in Services (GATS) is far below the average level of developing countries
  • telecommunications
    • China has taken measures to address monopoly in the sector, but it takes longer to reach the CPTPP level of liberalisation
  • e-commerce
    • China needs to improve rule-making over network access, source code, personal information protection, unsolicited commercial electronic message and data localisation
  • competition policy
    • China’s Anti Monopoly Law is still in its infancy
  • intellectual property (IP)
    • CPTPP has maintained most of the TPP provisions over IP protection, which are much stricter than IP rules included in China’s bilateral FTAs
  • labour
    • China might find it difficult to accept CPTPP rules over labour’s freedom of association and labour dispute settlement
  • regulatory coherence
    • it is a new challenge for China as its signed FTAs so far have not covered this topic
  • state-owned enterprises (SOEs) and designated monopolies
    • this provision is targeted at China whose SOEs have preferential treatment in many aspects

Provisions that are not so hard to accept include

  • technical barriers to trade
    • CPTPP standards are not much higher than that of China’s bilateral FTAs, but China might be cautious given the strong impact of such rules on the economy
  • investment
    • with schemes like pre-entry national treatment, negative list and investor state dispute settlement in place, China wouldn’t find it difficult to accept CPTPP investment provisions
  • financial services
    • a series of measures to liberalise the financial sector since 2018 has boosted China’s confidence to meet higher standards
  • government procurement
    • some of the strict TPP provisions on government procurement are removed in CPTPP
  • environment
    • climate change is not mentioned in CPTPP, and China has made unprecedented effort to address its environmental problems
  • small- and medium-sized enterprises
    • CPTPP agenda to promote SMEs development is in line with China’s policy goals
  • transparency and anti-corruption
    • CPTPP has the most demanding rules on transparency and would put China’s policy regulation ability to the test

Provisions that China has no problem accepting include

  • textiles and apparel
    • potential entry will increase China’s export of textiles and apparel to CPTPP member countries
  • rules of origin
    • such rules are aiming at protecting the interests of member countries rather than challenging them
  • customs administration and trade facilitation
    • China’s customs administration system and trade facilitation measures are among the most advanced in the world
  • trade remedies
    • CPTPP provisions on trade remedies are similar to WTO rules
  • cooperation and capacity building
    • CPTPP can facilitate China’s endeavour in international cooperation and can help China secure funding from developed countries
  • development
    • provisions on development are aiming at maximising interests for developing countries and therefore would benefit China
  • dispute settlement
    • CPTPP provisions are basically the same as WTO rules on dispute settlement
  • administrative and institutional provisions

In response, they suggest that China should deepen domestic reforms to reach CPTPP standards and actively seek a membership in the treaty to counter US containment. In the same time, China should also seek progress for its own initiatives, such as Regional Comprehensive Economic Partnership (RCEP) and Belt and Road.