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Expert: China must make extraordinary reforms to join TPP

  • January 31, 2022
  • , Nikkei , p. 9
  • JMH Translation
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Below is an interview of Tsuruoka Koji, Japan’s former TPP chief negotiator, as told to Nishimura Hiroyuki.

 

The Trans-Pacific Partnership (TPP) agreement is a major driving force for growth in a world where the international division of labor has become the norm. An ambitious economic community will be formed if China, the largest trading partner for most TPP participating countries, joins the pact. The premise for China’s participation is that it will properly implement reforms.

 

One issue in China’s participation is how state-owned enterprises should be handled. There is no problem with a country having state-owned enterprises, but the TPP forbids giving preferential treatment to state-owned enterprises and discriminating against private companies.

 

The rules of e-commerce require that data be circulated free and securely so that companies in the region, including small and medium-sized enterprises, can actively make transactions. Freedom of association must be guaranteed in terms of workers’ rights. China’s system does not meet these standards, and China must make extraordinary reforms [to meet the TPP requirements].

 

It is inexcusable [for China] to use the TPP to increase its own exports while refusing to implement reforms. “Backdoor admission,” or seeking a wide range of exceptions on the basis of security and public interest, is not permissible under the TPP, which is based on transparency. If China cannot pass the test now, it should come back when it can.

 

China’s participation is not a matter of negotiation but of verification of whether it can comply with the rules already in place. Discussions should be based on rules, not sentiment.

 

Japan also needs to be prepared. If Japan’s strategy is to urge China to join the TPP upon  implementation of reforms, then Japan must examine its tactics to carry out that strategy. For example, Japan can check every regulation to examine if there are areas where China can refuse to make reforms for security reasons.

 

Japanese companies have more than 30,000 offices in China and have the most accurate understanding of the Chinese economy. For this reason, Japan should play the important role of sorting out the issues and demanding China make reforms.

Diplomatic efforts to share strategies and tactics with other TPP member countries are also necessary. Japan, which has contributed to the establishment of the TPP among 11 countries, should never allow actions that destroy the spirit of the agreement.

 

The U.K. and Taiwan are also applying for TPP membership. The time required for the procedure varies depending on the situation in the country or region. We can proceed with flexibility, as there is no rule that states we cannot consider the participation of one country unless the examination of another country is finished.

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