Fran O’Sullivan: China the key issue as trade ministers gather in Auckland

Prime Minister Chris Hipkins and Baoshan district mayor Gao Yiyi during the PM's visit to China last month. The politics playing out this weekend in Auckland may show how far the Asia-Pacific bloc is prepared to go to accommodate China. Photo / Nathan McKinnon, Pool

Opinion

OPINION

A complex geopolitical game will be played out in Auckland this weekend as Asia-Pacific trade ministers meet to decide who they will admit next to their exclusive trade club.

Officially, the 11 ministers are in Auckland to review the CPTPP trade agreement and look at whether new chapters should be added, such as on inclusivity and indigenous rights.

But the real issue they confront is whether China should be given the go-ahead to proceed through to negotiations.

There are a range of other possibilities: South Korea, China, Taiwan, Uruguay and Ecuador – all of which have submitted applications via New Zealand to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

Even Ukraine, whose president Volodymyr Zelenskyy has made the fanciful claim that his war-torn country is in a position to complete negotiations in short order.

There will be a bit of ceremony as UK Trade Secretary Kemi Badenoch signs her country’s accession protocol tomorrow – the first country from outside the Asia-Pacific region to join the pact.

The CPTPP is promoted as an open and inclusive plurilateral trade agreement which any nation can join as long as it meets key requirements and ministers reach a consensus that the bid should proceed.

But ministers coming to New Zealand from the 11 countries are divided. While they have economic interests to consider, strategic questions will also be to the fore.

Canada and Australia have quietly - and not so quietly - opposed Chinese accession while any coercive measures against their countries endure.

Canada’s International Trade Minister Mary Ng – who has been promoting the Zelenskyy bid – has been courting new business and trade relationships in Asia to derisk exposure to China.

She maintains that her dealings with China are respectful. But there is a long history, including Canada’s arrest of the Huawei chair’s daughter on behalf of the US, and the subsequent Chinese retaliation, which have made for a vexed relationship.

Australian Prime Minister Anthony Albanese is endeavouring to stabilise relationships with China.

As with New Zealand, China is Australia’s largest trading partner. But while it has resumed imports of Australian coal, timber, cotton and copper after a major fracas under the Morrison Government’s reign, Australian wine and lobster are still subject to tariffs or unofficial bans.

There are other issues, particularly the jailing of Australian nationals Cheng Lei and Dr Yang Hengjun in China and bounties announced by Hong Kong for the arrest of two exiled political activists living in Australia.

Australian Foreign Affairs Minister Penny Wong met China’s foreign affairs supremo Wang Yi on the outskirts of the Asean foreign ministers’ summit in Jakarta this week for a “frank” conversation on trade impediments. But nothing concrete has emerged yet.

Others take a different stance.

This year, Singapore’s Gan Kim Yong said his country was willing to facilitate a dialogue between the United States and China to help repair their relationship, citing growing tensions between the superpowers as detrimental to the world.

Singapore and China have since worked on upgrading their own bilateral free trade agreement.

Like New Zealand, Singapore faces a delicate balancing act in its relationships with China. Along with Malaysia, Singapore has openly supported China’s bid to join the trade club as long as it can meet requirements.

New Zealand had officially been non-committal. But that changed during the Prime Minister’s visit when the official statements after his meeting with Premier Li Qiang recorded that New Zealand “welcomed” the application, noting that aspirant economies have to demonstrate that they can meet the high standards of this agreement.

Singapore, like New Zealand, faces a delicate balancing act in its relationships with China. Photo / 123RF

Trade and Export Growth Minister Damien O’Connor had a little-heralded meeting with Chinese Minister of Commerce Wang Wentao while in Beijing recently on the Prime Minister’s official visit.

O’Connor has cited his role as commission chair as the reason why his responses to questions on China’s bid have since been effectively anodyne.

It was left to Wang, on his ministry’s website, to post a readout: “Taking the opportunity of our leaders meeting, China is ready to work with New Zealand to promote balanced trade development and stay committed to the high-quality implementation of the upgrading protocol of the China-New Zealand FTA to inject fresh impetus into bilateral economic and trade relations.

“China is also ready to step up exchange and co-operation with New Zealand at the WTO and Apec and under the Rcep, CPTPP and Depa”. The little-known Minister of State for Trade and Export Growth, Rino Tirikatene, will be advocating New Zealand’s interests.

The timing of the Chinese application on September 21, one day after the Aukus security partnership was announced, has led to speculation.

It has been viewed by the US – which reneged on joining the earlier TPP – as a geopolitical pincer movement by China.

But while a US Congress research group has just published a short report for members which by deduction makes clear what it has missed out on by not joining the club, there is no appetite from the Biden Administration for the US to join the successor agreement.

The Chinese Ministry of Commerce has tasked a team to look at just what China will have to do to meet CPTPP strictures.

If China does get approval to proceed to the next stage, it will face having to make major changes to its economic system.

The politics that play out this weekend in Auckland will be instructive on just how far the Asia-Pacific bloc is prepared to go to accommodate China.