The US could invoke a clause in its trade agreement with Canada and Mexico to block China’s application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a government official said yesterday.
Under Article 32.10 of the Exceptions and General Provisions of the United States-Mexico-Canada Agreement (USMCA), if either Canada or Mexico enter a free-trade agreement with a nonmarket economy — such as China — the US could withdraw from the agreement.
“If that clause applies to multilateral free-trade agreements such as the CPTPP — which Mexico and Canada are members of — that might be cause for the two countries to oppose China’s membership,” a senior Executive Yuan official said on condition of anonymity.
Echoing an assertion made in an analysis by The Diplomat editor-in-chief Shannon Tiezzi on Friday, the source said that China might see CPTPP membership as a means of circumventing trade restrictions imposed by the US in an ongoing US-China trade dispute.
“However, China is an authoritarian regime that lacks transparency, and its laws and market systems are far removed from those of existing CPTPP members,” the source said. “We will have to wait to see exactly what its intentions are.”
The USMCA was introduced in January last year to replace the North American Free Trade Agreement, which had been in place since 1994.
Although the USMCA was signed by former US president Donald Trump, who took a tough stance on China-related issues, US President Joe Biden has not deviated from that position, the source said, adding that the world was waiting to see how the Biden administration would react to China’s CPTPP application.
“China engages in market interference through its state-owned enterprises — that is contrary to how a free-market economy should work,” the source said. “Many CPTPP members have expressed reservations about whether China can meet the agreement’s standards.”
Separately yesterday, National Medical University liberal arts professor Chang Kuo-cheng (張國城) said that concerns that China’s CPTPP bid would affect Taiwan’s own aspirations for membership were unfounded.
Joining the agreement would not be easy for China, and would require approval from all members, he said.
Nevertheless, China’s large economy and political resources would work in its favor in attempting to join, he added.
Additional reporting by Wu Su-wei
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