The U.S. Shouldn’t Let China Take the Lead on Trade
Editorial Board, 26 May 2021
However loudly U.S. politicians vow to compete with China, they seem happy to quit the field and let Beijing win in one crucial area: trade. If President Joe Biden hopes to build a coalition in Asia to counterbalance China’s rise, he can’t afford such defeatism.
U.S. allies such as Japan are especially eager to see the U.S. join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) — the 11-nation free-trade agreement that in its original form was intended to cement U.S. ties to Asia. Yet administration officials continue to dodge questions about the deal. At the same time, according to Bloomberg News, China has begun exploratory talks on its own possible accession.
China probably wouldn’t be asking if the U.S. were a member of the pact. The CPTPP has strong rules on subsidies, data flows, and labor and environment protections. Membership on those terms would require China to undertake far-reaching reforms, addressing several of the main concerns about its trading practices. The U.S. would have been able to block China’s entry if it didn’t trust Chinese pledges and could have held Beijing to account if it subsequently flouted the rules.
The CPTPP’s current members, on the other hand, may have less inclination or ability to resist Chinese pressure. The text leaves wiggle room for China to maintain some of its trade-distorting practices, such as its generous support for state-owned enterprises. Perhaps other countries could be persuaded to sign side deals giving Beijing longer to comply. China would be the group’s biggest member by far; smaller countries would have a hard time policing violations. And, by the way, China could veto future U.S. entry if it chose.
