Over recent weeks headlines have been full of the announcement of the AUKUS defence partnership.
In an unsurprisingly rapid response China, the unspoken target of the new submarine capabilities in Oceania, announced their application for accession to CPTPP.
Although they had previously made no secret of the ambition to apply to this multilateral agreement, with full awareness of the irony that it had been originally created to contain their regional economic dominance, it was nonetheless a well-timed jab at their international detractors.
Well aware of the political constrictions the Biden administration face in communicating the benefits of free trade agreements to a distrustful and divided American audience, China nimbly positioned themselves somewhat paradoxically as an empowering figure for free and rule-based trade in the Indo-Pacific region.
The realities of their suitability for the agreement undoubtedly remain highly questionable. China did show through negotiation and ratification of RCEP (Regional Comprehensive Economic Partnership) an ability not only to deftly manoeuvre on the international stage but also to find some flexibility in their ability to conform to higher international standards than they were used to with, say, rules of origin.
However, it seems highly unlikely that they will be willing to change further in order to meet the requirements that CPTPP demands, for example by improving labour rights or raising environmental standards.
Furthermore, their fractious relationship with Taiwan (who also submitted a request for membership of CPTPP in response to China’s action) hardly presents them as a uniting and benevolent regional power.
If their application is to be taken seriously (which arguably is not their immediate intention) they would do well to remember that all CPTPP members will need to approve their membership, some of whom will be deeply concerned by their continued antagonistic tendencies.
In the meantime, the White House have also been busy.
In addition to the newly founded AUKUS defence partnership, President Biden also met with the leaders of Japan, Australia and India with the intention of pushing the region’s democracies to the fore and dampening China’s regional influence.
These are the limited levers on the global stage still open to a President whose international agenda continues to be restricted by events at home. A challenging congressional fight for infrastructure spending and a populace who remain wary of globalisation and trade agreements generally leave little room for the US to resume its place as the leading global proponent of free trade and a rules-based system.
In fact, an eagerly anticipated statement this week on the administration’s new China trade policy proved something of a damp squib, with expansion of applications for tariff exemptions hardly a grand unravelling of the hard-line stance of the Trump era some had expected, despite some fiery rhetoric that accompanied the announcement.
The Biden administration does seem to appreciate the good sense of an approach driven by economics rather than strength of feeling, but if the US is to regain its mantle and contain its key competitor it will need to be bolder and more persuasive both at home and abroad on trade issues.
Meanwhile China, who may have seen little more than mischief in their CPTPP application, need to consider their position carefully; they can continue in their role as a regional antagonist leveraging trade as a weapon or they can grasp the true opportunity that US domestic obstinacy is providing and use their economic might to raise up their regional partners.
In doing so they can further cement the Indo-Pacific’s position as the economic centre of gravity for the coming decades. A cursory glance at their declining trade to GDP ratio would suggest that the latter is by far the more sensible course.
Tim Harding, Associate Director
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October 18, 2021
October 12, 2021