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    08:52 PM Han Xin Yi (LL.B. Candidate, Singapore Management University)

    The CPTPP Expansion in New Asian Regionalism

        

    Introduction

    On 15 July 2022, the Centre for Commercial Law in Asia (“CCLA”) of the Singapore Management University (“SMU”) Yong Pung How School of Law organised and hosted a webinar on “The CPTPP Expansion in New Asian Regionalism”. Supported by the Korea Foundation and the EU Jean Monnet Chair Programme, this webinar sought to provide insight into the CPTPP accession process along with economic and legal challenges confronting aspirant economies. Invited speakers hailed from different parts of the world and made insightful observations about the potential implications of the expanded CPTPP for new Asian regionalism and global trade governance.

    The webinar commenced with welcome remarks by Professor Lee Pey Woan (Dean, SMU Yong Pung How School of Law), followed by opening remarks delivered by H.E. Ambassador Jun Yamazaki (Embassy of Japan in Singapore) and Representative Francis Kuo-Hsin Liang  (Taipei Representative Office in Singapore).

    Ambassador Yamazaki first affirmed the potential of the CPTPP to create a free and fair economic order for the region and the world, where one could expect healthy competition and partnership to flourish once the common rules embedded in the CPTPP were fully implemented. In light of the COVID-19 pandemic and the ongoing Russian invasion of Ukraine, Ambassador Yamazaki emphasised that it is important for countries to renew their determination to maintain the free and fair economic order that they have painstakingly built, without resorting to protectionism or inward-looking world-views. Ambassador Yamazaki finally stressed that the CPTPP’s spirit and principles must be upheld in all circumstances, including its zero-tolerance towards economic coercion and unfair trade practices.

    Representative Liang then shared Taiwan’s perspective on the CPTPP and the importance of Taiwan’s participation in this agreement. He opined that the expansion of the CPTPP is a concrete expression of the will of its current members and aspirant economies to safeguard a rule-based global trade regime. Representative Liang also mentioned that Taiwan has submitted its application for CPTPP membership in September 2021, and is committed to joining the high-standard agreement. In preparation for its accession to the CPTPP, Taiwan has implemented wide-ranging adjustments to its economic and trade policies in a bid to align with the CPTPP’s provisions. He concluded that as the world places greater importance on building an open and inclusive trade regime based on high standards and shared values, the CPTPP will continue to be relevant and beneficial not only to regional economic integration but also to world trade and the global economy.

    The session proceeded with a panel discussion on the CPTPP moderated by Professor Pasha Hsieh (Jean Monnet Chair in EU-ASEAN Law and Relations, SMU Yong Pung How School of Law).

    The CPTPP Expansion from a Peruvian Perspective

    Ms Andrea Bulnes Acevedo (Trade Official, Ministry of Foreign Trade and Tourism of Peru) kicked off the discussion with a brief introduction to Peruvian foreign trade. She highlighted that Peru’s trade with Asia has grown considerably over the last few decades, with many countries in Asia currently forming the leading export destinations for Peruvian goods. Peru has also become the 8th country to ratify the CPTPP, which entered into force for Peru on 19 September 2021.

    Ms Bulnes Acevedo then proceeded to discuss the importance of the CPTPP’s expansion. She noted that the CPTPP is a rules-based agreement that would strengthen the international trading system once more countries decide to ratify it and comply with its high-standard provisions. Expanding the CPTPP would also motivate those signatories for which the CPTPP has yet to enter into force to ratify the agreement as soon as possible. However, Ms Bulnes Acevedo cautioned that potential applicants such as China may face challenges in meeting the high-standard provisions relating to e-commerce and state-owned enterprises (SOEs), which would delay their accession process.

    Is the CPTPP Still Fit for Purpose?

    Next, Dr Tracey Epps (International Trade Consultant and Research Affiliate, Faculty of Law, University of Otago) offered her views on whether the CPTPP, against the backdrop of increased food insecurity and political instability globally, is still fit for purpose for regional economic integration. While she acknowledged that the CPTPP offers good market access outcomes overall, it does not adequately address issues such as climate change or sustainability commitments, which many FTAs already encompass. Dr Epps raised the example of how the EU and New Zealand recently concluded negotiations for an FTA which makes non-compliance of a country’s Paris Climate Agreement commitments a breach of the FTA, and consequently enforceable through the FTA’s dispute settlement mechanism. Thus, she suggested that the CPTPP should likewise evolve and adapt to the changing global context.

    Dr Epps also echoed the concerns raised by Ms Bulnes Acevedo in relation to China’s application for accession to the CPTPP. She opined that if current CPTPP members take a strict approach of requiring “gold standard” compliance of the CPTPP, it is inevitable that China will be required to undertake reforms which it may be unwilling or unable to do in the immediate future. Thus, she cautioned that China may face significant obstacles in its accession process.

    The CPTPP Expansion from a Japanese Perspective

    Professor Yuka Fukunaga (Waseda University) subsequently offered a Japanese perspective to the CPTPP’s expansion. From an economic perspective, she opined that it would be ideal if more countries joined the CPTPP so that more economic benefits can be reaped for all CPTPP members. Expanding the CPTPP would also enhance the robust economic ties that Japan currently shares with countries such as China and South Korea who have applied for CPTPP membership. Although Professor Fukunaga believed that accession by China is legally feasible, she was careful to emphasise that the question may ultimately be a political one – that from the political standpoint of Japan, it may be extremely difficult to accept China’s accession to the CPTPP as that would effectually eliminate the possibility of the United States returning to the CPTPP. Given such political considerations, Professor Fukunaga was not optimistic that Japan would embrace China’s accession to the CPTPP.

    Professor Fukunaga further observed that the global governance landscape is undergoing a significant transformation. She posited that the primary focus of global governance has shifted from trade to non-trade matters such as climate change, sustainability development goals and public health. In this regard, she believed that trade instruments such as the CPTPP should tweak their approaches to tailor to such global challenges. Professor Fukunaga also proposed the usage of soft law instruments such as declaration statements in achieving common goals. In her view, such soft law instruments are gradually becoming more important than binding rule-making processes as more countries would be more amenable to abiding by them.

    CPTPP’s Two Critical Challenges

    Professor Jaemin Lee (Seoul National University) then examined two challenges faced by the CPTPP, namely the lengthy accession process for new members and the CPTPP’s difficulty of keeping up with rapidly evolving trade norms. In relation to the first challenge, Professor Lee observed that a practical problem arising from the accession process is the high membership fee for a new applicant. The process of CPTPP accession is also relatively laborious and time-consuming, because an applicant economy would have to undergo bilateral negotiations with all existing 11 members on key outstanding issues. This raises pertinent concerns about the extensive duration required for an applicant economy to finalise its membership in the CPTPP. Professor Lee further noted that the membership approval process of the CPTPP implies that all existing CPTPP members possess the power to veto a new application for membership, introducing greater uncertainty into the accession process. Thus, Professor Lee holds the view that the unpredictable and uncertain nature of the CPTPP’s accession process would create an obstacle for aspirant members.

    Another challenge confronting the CPTPP is how its provisions may keep up with the rapidly changing global trade landscape, in light of the growth of the digital economy and the COVID-19 pandemic that has befallen the world. For instance, Professor Lee noted that WTO members recently concluded an agreement on fisheries subsidies which is far more expansive than the CPTPP’s counterpart provisions. In this vein, a challenge remains as to how the CPTPP may be updated with such new provisions found in newly concluded trade agreements such that it stays relevant amongst all the trade agreements in the world.

    Australia’s View on Prospective CPTPP Members

    Finally, Dr Han-Wei Liu (Senior Lecturer, Monash University) presented an Australian perspective on the CPTPP. He outlined Australia’s receptiveness to the CPTPP’s expansion as it would allow for Australia to complement its existing FTA networks with other countries. However, Dr Liu also highlighted that the CPTPP may not be suitable for all of Australia’s trading partners, especially those whose current trade and investment setting would make it difficult for them to meet the CPTPP’s high standards or comply with its rules.

    Dr Liu proceeded to discuss Australia’s attitude towards several CPTPP applicants such as Taiwan and China. In a report discussing the CPTPP’s expansion, Australia’s Joint Standing Committee on Foreign Affairs, Defence and Trade recommended that the Australian government work with other CPTPP members to encourage and facilitate Taiwan’s accession to the CPTPP and to consider negotiating a bilateral Taiwan-Australian FTA concurrently. The report also recommended that the Australian government work with other CPTPP members to encourage China to re-establish full trading relations, including ending its coercive trade measures and re-engaging in ministerial dialogue. Finally, the report urged China to demonstrate an ability and willingness to commit to the CPTPP’s high standards, prior to members supporting the commencement of an accession process.

    As the panel discussion drew to a close, Assistant Professor Lau Kwan Ho (CCLA Deputy Director, SMU Yong Pung How School of Law) delivered his closing remarks and expressed his gratitude to all panellists and participants for gracing the event with their presence.

    * The writer would like to thank the SMU Centre for Commercial Law in Asia, and Professor Pasha Hsieh for organising the webinar and for the opportunity to attend and cover the event.

    * This blog entry may be cited as Han Xin Yi, “The CPTPP Expansion in New Asian Regionalism”  (23 July 2022) (http://www.singaporelawblog.sg/blog/article/280)

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