Possible Chinese Strategic Responses to the Trans-Pacific Partnership Agreement

Li Chunding 1 and John Whalley 2,3,4
1 Institute of World Economics and Politics, Chinese Academy of Social Sciences, Beijing, China
2 Department of Economics, Western University (UWO), London, Canada
3 Centre for International Governance Innovation (CIGI), Waterloo, Canada
4 National Bureau of Economic Research (NBER), Cambridge, USA

Abstract:  Negotiations for the Trans-Pacific Partnership (TPP) Agreement have concluded, but the TPP still must be ratified by each of the 12 member countries. China is the world’s second largest economy and yet it has not joined the TPP. This  has provoked much debate in China as to the best strategic approach to the TPP. This paper analyzes China’s possible strategy for the TPP agreement. We make three key points. First, the security of market access should be China’s main concern in any free-trade agreement negotiations, regrettably, it is not included in TPP. The second point is that the present TPP agreement is somewhat diminished from its ambitious original claims. We suggest four strategies for China. The first is to promote the development of China’s remaining regional and bilateral free trade agreements (FTAs). The second is to negotiate a bilateral FTA with the United States. The third is to promote deep domestic reforms via enlarged TPP coverage. The last is negotiating entrance to the TPP as soon as possible so that terms of entering do not worsen.
Keywords:  Trans-Pacific Partnership, China, free trade agreement

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