logo logo

China to ease economic and trade rules to aid CPTPP pact bid, amid scepticism over reform commitment

South China Morning Post | 30 June 2023

China to ease economic and trade rules to aid CPTPP pact bid, amid scepticism over reform commitment

by Amanda Lee

China has unveiled new measures to help its bid to join an Asia-Pacific trade agreement as Beijing presses on with its goal to reach the standards of the 11-nation deal, despite the thresholds for entry deemed by some members to be too high for the world’s second-largest economy.

The measures, part of a document on opening up, will be introduced on a trial basis in some of China’s free-trade zones and ports, and are aimed at aligning with “high-standard international economic and trade rules”, the State Council said on Thursday.
Chen Chunjiang, assistant minister at China’s ministry of commerce, said that the measures offer “practical support” to joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), as well as the Digital Economy Partnership Agreement (DEPA).
The trials will help China to accumulate experience and also demonstrate its willingness and ability to join high-standard economic trade agreements, Chen said.

“Joining CPTPP is in the interest of China, and I think it is also in the interest of all CPTPP members, and also in the interest of economic recovery in the Asia-Pacific region and the world,” Chen added on Friday.
Chen also said that China has conducted in-depth research and evaluation of the agreement and organised the reform measures and relevant laws and regulations for joining the trans-Pacific trade pact.
“In the next step, we will continue to maintain communication and consultation with all member parties,” Chen added.
China applied to join CPTPP in September 2021 and DEPA – which builds upon the digital or e-commerce chapters of existing free-trade agreements – in November 2021.

CPTPP membership requires approval from all member countries, namely Canada, Mexico, Peru, Chile, New Zealand, Australia, Brunei, Singapore, Malaysia, Vietnam and Japan. The United Kingdom, having applied in June 2021, reached an agreement to join in March and is expected to formally sign the pact this year.
China’s new measures include changes prohibiting relevant authorities asking for “the transfer of or access to, source code of software owned by a person of another party, as a condition for the import, distribution, sale or use of such software, or of products containing such software”.

“I think this document is part of China’s ongoing efforts to address the concerns in its CPTPP accession. I’d expect more changes along the way as [President Xi Jinping] has made joining the CPTPP one of his goals,” said Henry Gao, a professor of law at Singapore Management University.

The European Chamber of Commerce in China also said the document was “a step in the right direction”, but added that further measures are still necessary.
The changes on the transfer of source codes “does not elaborate the circumstances under which this would apply, there is a level of uncertainty about its implementation and any resulting implications,” the chamber said.
President Xi has said that China is open to negotiations on industrial subsidies and state-owned firms to be accepted into CPTPP.
Member countries, including Australia and Japan, have raised concerns over China’s ability to comply with reforms needed for the accession.

“Ultimately, China’s chances would depend on the US. If the US were to come back into the CPTPP very soon, then China would not stand a chance, but if the US drags on for too long in returning to the CPTPP, then China’s bid would be taken more seriously by CPTPP members,” Gao added.
The CPTPP emerged after former US president Donald Trump withdrew the country from its predecessor, the Trans-Pacific Partnership, in 2017.
The Biden administration has not revisited the idea, but has sought to create new frameworks, including the Indo-Pacific Economic Framework for Prosperity.
China also pledged to relax temporary entry rules for business executives and their families, allowing them to enjoy the same length of stay as company representatives.

The measures “send a good signal for the further resumption of people-to-people exchanges”, the European chamber added.
“But other related challenges remain, such as the erosion of the soft infrastructure that is vital for maintaining a vibrant foreign community in China.
“For example, with international schools and medical clinics finding themselves short of both staff and customers, their service offerings have reduced overall, which makes relocation to China a less attractive proposition, especially for senior-level talent who are more likely to bring their families.”
On Wednesday, New Zealand publicly endorsed China’s participation in both CPTPP and DEPA following a meeting between New Zealand’s trade minister Damien O’Connor and his Chinese counterpart, Wang Wentao, on Monday.

New Zealand will host a meeting of CPTPP members in July, when new applicants are expected to be considered, with Taiwan, Ecuador and Costa Rica having also applied to join.

New Zealand Prime Minister Chris Hipkins said all applications to join CPTPP would be considered.
Beijing has previously opposed Taiwan joining “any agreement or organisation of an official nature”.

 source: South China Morning Post