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The CPTPP dilemma: Economic merit versus geopolitical calculation

"Att: B402, and read back a couple -- Trans-Pacific Partnership Summary, Pros and Cons"

Peter Varghese

Trade arrangements work best when not hostage to security concerns.


Trade liberalisation, for all its challenges and compromises, serves the collective good (Getty Images)

Published 27 May 2025

How far should geopolitical calculation drive trade agreements? It’s the question raised in whom to support and whom to stall for admission to the 12 nation, adjective laden Comprehensive and Progressive Trans-Pacific Partnership, or CPTPP. And it’s the type of dilemma that will be increasingly familiar in the years ahead.

The era of global multilateralism is sadly over. What has not disappeared is the reality that we still face challenges which require collective action such as nuclear non-proliferation, climate change, and pandemics. We cannot wish them away or shrug our shoulders and say nothing can be done. Australia has a proud history of multilateral activism, and the re-elected Albanese government needs to ask itself: how can we patch up multilateralism as we head into a world of sharper bipolar competition? A good start would be to understand the changed terrain.

Neither China nor any other state can easily assume the role the United States did over the last 80 years as the architect of global multilateralism. China may see an opportunity to rally the world against the Trump administration’s assault on the multilateral order, but it is unlikely to succeed. Not even the so-called Global South of developing countries are willing to accept China as its natural leader. The Global South will no doubt grow in significance but there are many contenders to lead it so a loose form of collective management is more likely.

Today we are trapped by the appeal of concepts such as self reliance
and supply chain security which are politically compelling
but economically stunted.

China is getting better at playing the multilateral game, but its credentials are hardly stellar, and its preference is still to exert bilateral pressure to achieve its objectives. That is a feature of all great powers, including the United States at the peak of its multilateral leadership. Australia knows from the trade punishment China imposed on us that it is a selective champion of multilateral rules.

A shift to more regional, less global, outlook looks likely. But our region, the Indo-Pacific, is the most prone to US-China rivalry so progress will be slow. Institutions such as the East Asia Summit, APEC and the ASEAN plus dialogues are effectively stalled.

Regional trade arrangements may however offer one path to keeping the flickering flame of trade multilateralism alive. Both the CPTPP and the 15 country Regional Comprehensive Economic Partnership (RCEP) hold out the promise of expanded membership. CPTPP is a gold plated trade agreement in terms of the standards that it sets. Importantly, it is also open to countries outside the region. The United Kingdom, for example, is a member. So this is a mechanism for pushing out the boundaries of trade liberalisation, using a regional platform to slowly rebuild a broader constituency of support beyond the latticework of arrangements in the Indo-Pacific. A structure which falls short of global but is more than regional, extending into Europe.


Officials in 2017 negotiations for what would become the Comprehensive and Progressive Trans-Pacific Partnership agreement, Danang, Vietnam (Kyodo News via Getty Images)

The objective should be to build a network of countries which reaffirm and indeed expand their commitments to trade and investment liberalisation at a time when the advocacy of open economies has become politically toxic. It will not be easy to find a replacement for the Washington Consensus .. https://www.lowyinstitute.org/the-interpreter/debate/new-washington-consensus .. which shaped economic reforms until the global financial crisis of 2008, but replace it we must if we are not all to become poorer. Today we are trapped by the appeal of concepts such as self reliance and supply chain security which are politically compelling but economically stunted.

If we want to build on and expand the trade liberalisation momentum created by CPTPP and RCEP we must not weigh them down with a geopolitical veto. The origin story of the CPTPP was a geopolitical play by the Obama administration, which saw the original Trans-Pacific Partnership (TPP), the precursor to CPTPP, as the means of ensuring that trade rules were not written in Beijing. The US subsequently walked away from the TPP but not from its geopolitics.

To break this impasse, the sole criterion we should apply to CPTPP membership is whether an applicant is capable of complying with the standards and provisions of the agreement as it negotiates its consensus entry. Ideally, we would like to see the United States, China and India all part of one or the other of these agreements. If we allow geopolitical considerations to determine membership, we will end up with both weaker trade arrangements and few geopolitical returns. Australia should bear this in mind as it considers both China’s and Taiwan’s applications to join the CPTPP, even if neither’s entry would add significantly to what we currently have with each of them.

Trade liberalisation, for all its challenges and compromises, serves the collective good. It is not zero sum. It can lift all boats. It is not immune from geopolitics but nor should it be held hostage to geopolitics. We live in an interconnected world but that does not mean we should deliberately weigh down trade arrangements with geopolitical and security baggage. That is one reason why if Australia does go down the path of negotiating a security agreement with the European Union it would be quite separate to any trade agreement.

Today, advocates of trade liberalisation stand accused that the approach never delivered the political openness that was promised. But Australia never believed that trading with China would convert it into a Jeffersonian democracy. We did, however, believe that it could lift the living standards of both countries, and while it did nothing to expand political space in China it did expand personal space. Yes, a richer China is a more powerful China, and that is why constructing a balancing and constraining equilibrium is so important. The objective should not be to keep the Chinese people poor but rather to work with like minded partners to manage the consequences of a more prosperous and powerful China.

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https://www.lowyinstitute.org/the-interpreter/cptpp-dilemma-economic-merit-versus-geopolitical-calculation

The Lowy Institute is a center-right source, with impeccable credibility credentials. In the interest of balance
i searched for a leftish view on the CPTPP today, to no avail. I did however snag this North Dakota comment:

What You Should Know About the CPTPP



What is the CPTPP?

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a free trade agreement with eleven participating countries, including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. The CPTPP came into force on December 30, 2018. The signatories make up 13.4% of global GDP with approximately $13.5 trillion US dollars. The agreement is now one of the largest free trade agreements in the world, alongside the US Mexico Canada Agreement (USMCA), European Single Markets, and the Regional Comprehensive Economic Partnership (RCEP).

What is the impact?

The agreement strengthened ties between the participating countries and covered several groundbreaking issues with the increase of digitization in economies worldwide. Specific commitments outlined are investment, government procurement procedures, intellectual property, state-owned enterprise regulations, environmental concerns, labor issues, and small and medium enterprises obligations.

Japan remains the top export destination among the other ten CPTPP members and leads the group for many negotiations. The US has a high level of imports from CPTPP countries, but China continues to increase its imports from the countries as well.

Due to the ongoing global pandemic, the success of the CPTPP’s impact is challenging to measure, but some countries like Vietnam have shown a 6% growth in global exports in 2020. Brunei, Singapore, and Vietnam have also shown increased imports post CPTPP, but similar data shows this in the countries’ overall import data from the world, not just members of the alliance.

The digital sphere has shown great promise globally, but statistics from CSIS support that data and digital services between CPTPP counties are specifically rising. The agreement has influenced eCommerce and the digital topics for discussion in other ongoing agreements such as the 2020 Digital Economy Partnership Agreement (DEPA), the Singapore-Australian Digital Economy Agreement (SADEA), and the Regional Comprehensive Economic Partnership(RCEP).

Overall, the import trade data between CPTPP counties and imports data with the rest of the world remains consistent. The impact of the CPTPP and increased imports cannot be directly correlated at this time (Suominen, 2021).

A Little Bit of History:

As calls for the US to join the agreement come in, the history of how the CPTPP came to fruition is essential. Trade talks began in 2005 between the US and some of the Pacific Rim countries, and additional countries proceeded to join the conversation into 2011 with twelve negotiating countries. By 2015 and 19 official rounds of negotiations, an agreement was made and signed in 2016 called the Trans-Pacific Partnership (TPP). The TPP was a large trade agreement that would have comprised nearly 40% of the global economy with involvement from twelve Pacific Rim countries. The US withdrew its involvement due to shifts in domestic politics. The remaining 11 countries, also known as TPP-11, continued with a similar agreement called the CPTPP. This agreement moved forward in December 2018 and replicated many of the measures from the TPP.

There are a few differences between the original TPP and the CPTPP, many of them were items strongly valued by the US, and without US involvement, the unpopular items were sidelined. The CPTPP has less regulation than the TPP had regarding intellectual property rights, environmental provisions, and labor rights. It is also important to note that CPTPP indicates that these measures are “suspended,” not removed, indicating their potential reinstatement should the US choose to join the agreement in the future (McBride, Chatzky, & Siripurapu, 2021).

The US may find it beneficial to join the agreement if negotiations are made to ensure stronger labor standards, intellectual property rights, and environmental provisions. But currently, the US has not applied to join the agreement as it stands.

Looking Ahead:

The agreement was created with expansion in mind, and since its creation, many countries have expressed interest in joining. The CPTPP has a number of applications waiting to be confirmed, including The United Kingdom (UK), China, and Taiwan.

During the June 2021 meeting of the CPTPP, members agreed to review and proceed with the application for the UK. In the UK, concerns have been raised about the UK’s high standards for pesticide use, animal welfare, and food labels, and not wanting to lower standards to let in less scrutinized products. An appointed working group is underway, and admittance is anticipated for early 2022 if conditions are favorable.

[Insert: Of course we know now - Britain’s joining CPTPP. So what the hell is it?
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=173680697]

In September 2021, China and Taiwan independently applied to join the CPTPP, and the committee will work through their process for confirmation. China’s approval will likely take more negotiations to meet each measure in the CPTPP than the UK’s pending approval.

Several countries, including Japan, say they would welcome the US into the CPTPP but also caution that they are unwilling to renegotiate the provisions (McBride, Chatzky, & Siripurapu, 2021). The call for the US to join the CPTPP would be seen as an act of stability with recent tensions building in China with many other nations (Okutsu, 2021).

Several other countries have expressed interest in joining the CPTPP, and a few were previously involved with the TPP, including the US, the Philippines, and South Korea. To join the CPTPP, unanimous consent from all members is required, which may play a role in the future of the agreement and its participants.

At this time, none of these countries have submitted formal applications to join the CPTPP. As it stands, the CPTPP’s success is difficult to measure with global changes due to the pandemic, but there is a promising outlook as the parties involved continue to deepen ties and admit like-minded countries.

NDTO will contiune to monitor the CPTPP for updates and keep you informed.

References - https://ndto.com/what-you-should-know-about-the-cptpp/