China weighs choices on pacific trade pacts: experts

SYDNEY - Some leading political economists have lauded China's renewed interest in the controversial Trans- Pacific Partnership (TPP), telling Xinhua that China would enjoy more leverage on the tenor of negotiations "from the inside."

While the US has touted the TPP as a new kind of trade pact beyond the traditional areas of free trade agreements (FTA) - covering regulatory consistency across economies as well as the liberalization of trade in goods and services - China has been championing the Association of Southeast Asian Nations' Regional Comprehensive Economic Partnership (RCEP), a free trade pact that envisions more members but less strident terms.

China's Ministry of Commerce has indicated a willingness to consider China's integration into the US-led TPP, "based on careful research and according to principles of equality and mutual benefit."

Professor Geoffrey Garrett, Dean of the Australian School of Business at the University of New South Wales, told Xinhua "China should persevere on what will likely be a slow road to TPP."

"It will probably take years for the current TPP members to come to a final agreement on their rules for Asia-Pacific trade, and the process will be slowed further if other countries, such as South Korea, decide to join the talks. So China has time on its side,"

Sanchita Basu Das, an ISEAS Fellow and Lead Researcher for Economic Affairs in the ASEAN Studies Centre at the Institute of Southeast Asian Studies, agrees with Professor Garrett that the TPP structure is not a tool for "containing" China.

"First of all, the TPP initiative could be seen as similar to the rules of the WTO, where countries get together to follow certain guidelines and standards in conducting economic activities and bringing in a level playing field for each other."

In this regard nations constrain each other from unfair international trade practices, not those that are not party to the agreement.

"Second, trade agreements such as the TPP cannot 'contain' China, as the TPP members who participate in Asia's production network with China may not support it. Even the US needs China to cooperate on commercial activities," Basu Das said.

The TPP has been widely seen as the economic foundation of the US pivot to Asia, compounding China's measured reluctance.

Garrett says there are two reasons for China's caution.

"One reason is that China wants to take part in setting international rules, not just having to take or leave rules written in America. The other reason is that it will take time for China to be ready to accept the kind of reforms to its domestic economy the US is proposing." He said.

Countries that have chosen to stay on the sidelines, including China, that now seek to join the TPP during or after the negotiations have to accept all the terms that have already been agreed upon prior to their entry.

As such, RCEP negotiations, which began earlier this month, include the 10 ASEAN member nations and the six countries that already maintain FTAs with the regional organization-- Australia, China, India, Japan, the Republic of Korea and New Zealand.