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China’s trade-pact bid ‘impossible’ for Australia to approve while Beijing’s sanctions remain, sources say

South China Morning Post | 23 May 2023

China’s trade-pact bid ‘impossible’ for Australia to approve while Beijing’s sanctions remain, sources say

by Kandy Wong

China failed to secure a public endorsement from Australia to join a Pacific Rim-focused trading bloc during a recent high-profile visit to Beijing by Australia’s trade minister, multiple sources tell the Post.

Beijing wanted “a clear commitment from Australia, preferably public” that Canberra would support China’s bid to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and “deny Taiwan’s membership”, during minister Don Farrell’s trip in Beijing in early May, according to people on the Australian side with direct knowledge of Canberra’s actions.

China’s joining of the advanced trade and investment treaty is a key agenda item on the negotiation table between Beijing and Canberra amid their thawing ties, but a source said that “it would be impossible for the Australian government to publicly support the Chinese membership when trade sanctions were in place”.

“Australia did not oppose the Chinese membership of the CPTPP, but it would need to be on the basis of China reaching the trade standards of the CPTPP,” one of the four people added.
“Farrell told [Beijing] Australia did not support the Taiwanese membership – referring to the Albanese statement in November 2022,” the source said.

Australian Prime Minister Anthony Albanese said last year that Canberra was very unlikely to support Taiwan’s push to join CPTPP.

China applied to join the high-level trade pact in September 2021, which was quickly followed by an application by Taiwan.

Beijing opposes official interactions between any country and Taiwan, which it views as a breakaway region to be unified, by force if necessary, and rejects the island’s participation in any official agreement or organisation.

The CPTPP, which was called the Trans-Pacific Partnership before the United States’ withdrawal under the Trump administration, comprises 12 members – Canada, Mexico, Peru, Chile, New Zealand, Australia, Brunei, Singapore, Malaysia, Vietnam, Japan and the United Kingdom.

Britain reached an agreement in March to join the pact and is expected to formally sign it later this year, pending a legal review.

Stephen Olson, a senior research fellow at the Hinrich Foundation, said that China’s CPTPP application is “freighted with heavy geopolitical baggage”.

“Existing members recognise the economic centrality of China in the region, but many are concerned about China’s growing assertiveness,” he added.

On the trade front, he explained, existing CPTPP members have questioned the extent to which China adheres to its World Trade Organization obligations, with concerns about whether China would fully live up to the high-standard obligations contained in the trade framework.

“It’s hard to imagine any scenario under which a clear and definitive response to China’s application would be reached in the short term,” Olson said.

“Given the geopolitical as well as the trade complexities, slow-walking the application is probably the most judicious course from the perspective of existing members.”

Farrell told the Today Show on May 16 after his visit to Beijing that Australian cotton is back in Chinese markets, along with copper. Both sides are also working to resolve a dispute over barley, and the same process will be applied to wine.

But sources close to the Australian government also said there was “no update on wine” because “China remains unhappy” about Australia’s investment rules, including a ban on Huawei, telecoms and other denied investments.

Zhou Weihuan, an associate professor of law at the University of New South Wales, said that “a balanced approach would require Australian authorities to assess potential security risks objectively and even-handedly, and not to exercise their discretion in a way that may be viewed as overly biased against China or the Chinese government”.

“Australian authorities should also consider whether such investment can be approved based on conditions, which adequately address the security concerns so that rejection is unnecessary,” Zhou said.

Xiao Qian, China’s ambassador to Canberra, said on May 18 in Canberra that Australian timber was returning to the Chinese market after an import suspension in late 2020.

The Post reported last month that China had also issued an invitation “in principle” for Albanese to visit Beijing, and the trip could take place around September or October.
“Ambassador Xiao has confirmed the invitation, but no date has been set,” a source said.

“I think Albanese’s statement at the G7 meeting will delay the visit. Albanese is also under pressure from the opposition not to go until all sanctions are lifted.”

 source: South China Morning Post