More countries show interest in Asia-Pacific trade pact

China wants in.

The United Kingdom wants in.

Taiwan wants in.

South Korea is hanging around the entrance.

A growing queue of hopeful future members is forming for the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, and Canada will have the ability to help shape the group’s future.

That creates an opportunity for Canadian farmers to improve market access to some of the world’s most promising markets, many in agriculture think.

“We expect the Asian region to hold the largest potential for growth in beef demand over the next 25 years and securing further access to key Asian markets is a priority for us,” said Canadian Cattlemen’s Association president Bob Lowe Oct. 18.

“We are encouraged to see other countries’ interest in joining CPTPP, as long as they meet the ambitious nature of the trade agreement, which should open and expand exports for Canadian beef farmers and ranchers.”

Many trade analysts think some of the hopefuls could make it through the application and acceptance process because they are already generally in compliance with the free trading nature of the CPTPP. That includes the U.K. and South Korea.

But few think China has a chance of being accepted, and that applies to Taiwan as well, despite the island nation’s good trading reputation and friendly relations with CPTPP members.

“I guess anything is technically possible, but it strains credulity to imagine China being accepted,” said Jacob Shapiro, chief strategist for Perch Perspectives.

“I also doubt Taiwan will be admitted, at least not in the current geopolitical context.”

That context is the increasingly aggressive actions of China toward Taiwan, which it considers to be a breakaway part of China.

That will make most CPTPP members leery of offending China by admitting Taiwan or slamming the door on China. Nations like Malaysia and Singapore rely upon China’s enormous market and have already shown warmth toward China’s bid for membership.

But China has poisoned relations with two major CPTPP members, Canada and Australia, which makes it extremely unlikely that China’s bid will go anywhere. China has not only waged a diplomatic war against the countries, including what most observers consider “hostage diplomacy,” but it has also weaponized its trade policy and regulatory system to block most imports of major commodities such as canola, pork, wine and beef.

Canada’s diplomatic standoff with China appears to have subsided with Canada’s release of Huawei’s Meng Wanzhou, who was being held on a U.S. extradition request, and China’s release of Canadians Michael Spavor and Michael Kovrig. However, a cold peace now exists.

Australia’s situation is less peaceful, with Australian politicians more forthright in their criticisms of Chinese actions, including China’s conduct in the early days of COVID-19.

With the CPTPP providing every member with a veto on new member admissions, few expect Canada and Australia to let China into the club.

Even if Canada was willing to see China join, the U.S. could effectively block the move by threatening to kill the United States-Mexico-Canada Agreement, which allows its members to tear up the deal if one of the other members makes a trade deal with a trade-rules-offending nation like China.

Neither Canada nor Mexico is likely to dare U.S. wrath, with the USMCA at the core of each nation’s export economy.

The U.K.’s bid appears to most observers to be relatively easy to accomplish. It already has trade deals with members like Canada and New Zealand, and there is a sense it prefers a more “global Britain” than was possible when it was member of the European Union.

South Korea is also seen as a potential member of the CPTPP. It is a democratic, rules-following industrial and technological power that has vigorous trading relationships with most member states.

Meanwhile, the United States hangs like a raven above the pact, but unlike Edgar Allan Poe’s poem The Raven, in which the bird quoth “nevermore,” the U.S. speaks of “maybe, sometime.”

The U.S. was a driving force for the original deal, but former President Donald Trump rejected it on his first full day in office.

The pact’s original impetus came from the desire of the U.S. and other rules-following trading states to create a sphere in which the rules-based countries could create a counterweight to China’s attempts to forge its own sphere of China-dominated trade.

Trump’s withdrawal was a triumph for China, and its application to join the CPTPP is seen by some as more of a sneer and mocking of the U.S. than a serious bid to join.

U.S. domestic politics and the Biden administration’s preoccupations make it unlikely the U.S. will apply to join the pact any time soon.

Shapiro said the White House “hasn’t been able even to get its economic program off the ground at home, let alone pursuing an ambitious and controversial free trade agreement, so even though it is clearly in both the CPTPP’s interest and the U.S.’s interest to have Washington inside the CPTPP, that increasingly seems like a pipe dream in the short-term.”

So far the CPTPP has shown promise for Canada. Cattle farmers were pleased to see beef exports increase 37 percent in volume and 35 percent in dollar value between 2018 and 2020, and are surging in 2021 to CPTPP countries.