From WTO to CPTPP: What Makes the Consideration of China and Taiwan’s Accessions Different?

Written by Jacques deLisle.

Image credit: Liz Truss CPTCC Heads of Mission Roundtable by Number 10/ Flickr, license: CC BY-NC-ND 2.0.

In 2000-2001, China and Taiwan entered the World Trade Organization (WTO). Their admittance to the central institution of the international economic order was, in effect, a package deal that became possible with the assent of the United States, which had been a last principal obstacle to Beijing’s long-sought membership. Two decades later, China and Taiwan have applied to join the Comprehensive and Progressive Agreement for a Trans-Pacific Partnership (CPTPP). This arrangement emerged from the larger Trans-Pacific Partnership after the US opted out. The two bids face major challenges, including those born of changes in the international stature and posture of each of Taiwan, China, and the United States.

For Taiwan, the CPTPP today is an urgent imperative. Membership offers reductions in trade barriers and other impediments to access to the global economy that are especially valuable to highly trade-dependent and deeply internationally integrated economies. Such gains are all the more important given other contextual factors. The WTO has waned as a force for international economic liberalisation.

Due to Beijing’s opposition, Taiwan has been unable to forge many bilateral economic agreements or join regional trade pacts. CPTPP membership could help Taiwan diversify its external economic relations and mitigate its heavy dependence on the mainland—which has increased under the cross-Strait Economic Cooperation Framework Agreement and several follow-on accords—and the resulting vulnerability to Beijing’s political use of economic leverage. Like membership or meaningful participation in any major international institution (including the WTO), CPTPP accession for Taiwan would help shore up Taiwan’s chronically besieged international stature.

Taiwan’s CPTPP chances should be good. Taiwan’s laws and policies comply with the regime’s demanding standards. Moreover, as an arrangement that focuses on economic matters and that does not explicitly limit membership to states, the CPTPP—like the WTO before it—can avoid, or at least reduce, the grappling with the fraught question of Taiwan’s international status that bedevils many aspects of Taipei’s external relations. Moreover, Taiwan’s CPTPP application preceded China’s admission and thus does not face a Chinese veto (as it would if Beijing could take advantage of the CPTPP’s unanimity rule for admitting new members).

But such factors are not enough to make Taiwan’s near-term accession likely. Since Tsai Ing-wen became president, Beijing has again worked to shrink Taiwan’s international space, clawing back many of Taipei’s gains since 2008. Under pressure from the PRC, the World Health Assembly and the International Civil Aviation Organization Assembly have suspended the ad hoc participation Taiwan briefly enjoyed. Beijing has returned to inducing or welcoming Taipei’s dwindling cohort of diplomatic partners to switch formal ties to the PRC. In this context, Chinese official sources predictably have declared that the WTO arrangement of concurrent membership is not a precedent for the CPTPP. 

What Makes Taiwan’s Accession Uncertain?

Although China does not have the formal authority to block Taiwan’s accession, Beijing does have its influence on CPTPP members. And that influence is considerable, given China’s standing as a top trade and investment partner for many CPTPP states and the overlap between CPTPP membership and membership in the PRC-led Regional Comprehensive Economic Partnership (a multilateral trade pact larger than the CPTPP). More broadly, Beijing has formidable geopolitical and economic clout and is willing to use it to reward compliant states and punish defiant ones.

Washington’s backing for Taiwan’s accession to a major international economic accord is much reduced from the heady days of a quarter-century ago. The US had been the most influential architect of the then-recently established WTO. Washington was the de facto gatekeeper for China’s admission and negotiated many of the terms of China’s entry, including the PRC’s acceptance of broad commitments to domestic reform, “WTO-plus” obligations, and “WTO-minus” protections (from illiberal trade measures by other members). The US also gave potent backing for Taiwan’s near-simultaneous accession as part of the broader deal for China to join.

Today, the US is not even a member of the CPTPP, having opted out of the TPP at the beginning of the Trump presidency. More broadly, and despite the Biden administration’s assurances that the US is resuming its international leadership role, the US has long been souring on liberal trade and “trade-plus” agreements. US accession to the TPP was in trouble before Trump. It was stalled in Congress during Obama’s final days in office and rejected (in its then-existing form) by both major-party presidential candidates in 2016.

Under Biden, the US has made no moves to join the CPTPP. Instead, it has offered the Indo-Pacific Economic Framework (IPEF) as a more fragmented, narrower, and institutionally less robust alternative. Although promising to provide Taiwan with substitutes for IPEF membership and notwithstanding Washington’s escalating expressions of support for Taiwan’s international space and participation in recent years, the Biden administration left Taiwan off of the IPEF’s inaugural list.

More broadly still, since the turn of the millennium, the US has become less economically and politically dominant—especially compared to China. This slippage has reduced Washington’s ability to press for Taiwan’s CPTPP accession and other opportunities for Taiwan’s international status and participation. Washington’s recent efforts to rally “like-minded” states—ones with democratic polities and market economies—to address the challenges posed by a more powerful and assertive China hold some promise. Still, they have fallen short of compensating for the US’s losses in relative power and its tarnished soft power. Taiwan’s omission from IPEF and the lack of a stronger push from Washington for Taiwan’s CPTPP entry partly reflect these realities, including appreciation that CPTPP members and prospective IPEF participants would not welcome the trouble from Beijing that including Taiwan would bring. 

The Challenge of China’s Bid

However, dim near-term prospects for Taiwan’s CPTPP accession do not mean bright ones for China’s bid. Several factors would appear to favour Beijing. China’s standing as a top trading partner and an important economic partner for CPTPP states gives Beijing significant capacity for influence. And Beijing’s interest in accession has been rising, shifting from suspicions of the TPP as a US-orchestrated “anyone but China” pact to “favourably considering” seeking membership and then “actively promoting” the process of joining. Beijing does stand to gain from joining the CPTPP in terms of economic growth. China also could hope to score political points. This is especially if the US continues to forgo membership and thus facilitates China’s post-global Financial Crisis claim to be the most important defender of economic globalisation.

But China’s CPTPP initiative faces serious headwinds, some born of China’s long run of economic success. Beijing’s increased ability and willingness to press other states on a wide range of issues—including economic ones that are the focus of the CPTPP—have triggered greater wariness and opposition toward China, especially in the adjacent region. In this context, allowing China inside a key trade-plus regime raises troubling spectres. With membership, China may acquire still-greater leverage over fellow members on issues both core to the CPTPP and far removed from its formal ambit—including, for example, Tibet, Taiwan, Hong Kong, and human rights, as well as territorial disputes and other contentious issues in China’s bilateral relationships. Within the CPTPP, Beijing may push for rules that serve its own, often not-widely-shared, interests and preferences. 

Concerns about China’s failure to fulfil the requirements of a liberal international economic agreement are more serious today than they were when China joined the WTO. Because China now has a much larger and more deeply internationally integrated economy, the consequences of non-compliance would be much greater. Expectations that China will fulfil its formal legal commitments and, beyond that, undertake liberalising domestic economic reforms are much weaker than at the time of China’s WTO accession. This scepticism is fed by other member states’ experience with, or perceptions of, China’s performance in the WTO and shifts in China’s economic policy away from liberal, pro-market norms. Under Xi Jinping, examples include policies seeking a “dual circulation economy” self-sufficiency and eventually dominance in key technologies, greater party-state involvement in the operation of Chinese enterprises, and Belt and Road Initiative projects that give Beijing great influence with host country governments.

Despite many regional states’ long-standing preferences not to “have to choose” between Beijing and Washington, some key CPTPP members are now more likely to cooperate, with the US’s encouragement and participation, in ways that will impede China’s accession. Well beyond matters addressed in the CPTPP, the benign relations between China and many states outside the Global South in the late 1990s have given way to mutual suspicions, conflicting interests, and ideational rivalry—in more dire assessments, an incipient new Cold War between “democratic” and “autocratic” camps.

If (Not) Being in the CPTPP…

While Taiwan’s and China’s bids to join the CPTPP thus face tough struggles, winning accession is, in important respects, less valuable than WTO admission was more than twenty years ago. For Taiwan, for example, the vital gains in international stature that came with WTO membership are not replicable in the CPTPP. The CPTPP lacks the WTO’s status-boosting attributes of near-universal membership and robust structure as an international institution. In recent years, Beijing’s disposition to squeeze Taiwan’s international space has become more earnest, or at least more evident.

For China, CPTPP entry does not offer the strong validation of China’s acceptance into the international order that WTO accession signalled. CPTPP will not contribute to a profound transformation of China and its place in the world akin to that of WTO membership. A now much richer and more powerful China has less need for membership in the most significant international economic pact of the era. Beijing can get more of what it wants through ad hoc or unilateral efforts.

At the same time, not being in the CPTPP is still costly for reasons that extend beyond foregone economic opportunities. For Taiwan, a failed bid may further entrench its vulnerability-creating economic dependence on China and its Beijing-driven marginalisation in the international community. For China, a rejected or long-stalled application would be a political snub in some ways worse than it suffered in its long-frustrated march to WTO membership. Unlike in the late 20th century, China today sees itself as a great power entitled to a place at the table in every major international regime and a role in shaping any important international rules. 

For the US, continuing its self-inflicted absence from the TPP/CPTPP will reflect. It could exacerbate its shrinking role as a leader in international economic liberalisation and integration. US leaders’ changing rhetoric here may be telling. Clinton portrayed China’s admission into the WTO as an event that would change China, bringing it more into line with US-favoured liberal norms abroad and at home. Obama characterised the TPP as a gold standard agreement and the US’s entry in a competition with China over who would “write the rules of the global economy for the twenty-first century.” Trump withdrew from the TPP, declaring the deal unfair to the United States. And Biden has signalled a notably defensive posture, proclaiming that “China’s goal” to “become the leading…wealthiest…more powerful country” in the world will “not…happen on my watch.”

Jacques deLisle is Stephen A. Cozen, Professor of Law, Professor of Political Science, and Director of the Center for the Study of Contemporary China at the University of Pennsylvania, and Director of the Asia Program at the Foreign Policy Research Institute.  His writings on China’s engagement with the international order, Chinese law, US-China relations, and China-Taiwan and China-Hong Kong issues have appeared in the Journal of Contemporary China, Asia Policy, Orbis, China Review, Administrative Law Review and other journals and edited volumes. He is the co-editor of and contributor to The Party Leads All: The Role of the Chinese Communist Party in China’s Politics, Governance, Society, Economy, and External Relations (2022), After Engagement: Dilemmas in U.S.-China Security Relations (2021), Taiwan in the Era of Tsai Ing-wen (2021), To Get Rich is Glorious: Challenges Facing China’s Reform and Opening at Forty (2019), China’s Challenges (2014) and Political Changes in Taiwan under Ma Ying-jeou (2014). 

This article was published as part of a special issue on “Comprehensive and Progressive Agreement for Trans-Pacific Partnership.”

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