China-US Strategic Economic Dialogue talks about the timing of joining the TPP

The fifth round of the China-US Strategic and Economic Dialogue (S&ED) will be held in Washington, DC, from the 10th to the 11th of this month. Chinese President Xi Jinping’s Special Representative, State Council Vice Premier Wang Yang and State Councilor Yang Jiechi will host a dialogue with US President Barack Obama’s Special Representative, Secretary of State John Kerry and Finance Minister Jacob Lu.

Among them, Wang Yang will co-chair economic dialogue with Lu, and Yang Jiechi will co-chair the strategic dialogue with Kerry.

The dialogue has not yet begun, and the two sides have launched a dialogue on the free trade zone. In May, US Deputy Secretary of Commerce Sanchez said during his visit to Japan that he would welcome China to join the Trans-Pacific Partnership Agreement (TPP). Shen Danyang, spokesman of the Ministry of Commerce of the People's Republic of China, immediately responded that China will analyze the advantages, disadvantages and possibilities of joining TPP on the basis of earnest research and based on the principle of equality and mutual benefit.

Investigating the wording, whether it is the US "under certain premise" or the Chinese "based on the principle of equality and mutual benefit", is quite subtle. Authorities told the "First Financial Daily" reporter that if China wants to join the TPP negotiations, it may involve sensitive state-owned enterprise reforms, trade union rights, environmental protection standards, and intellectual property rights.

Any of Wei Wen, the head of the China-US-European Center for Strategic and Economic Research at the China Institute of International Trade, said that the time for China to join the TPP is far from mature – not to mention whether China can make concessions on these issues, such as developing economies like China. Once truly involved in the TPP process, if “equality and mutual benefit” is to be achieved, the negotiating parties in developed countries will inevitably have to revise the current high threshold for developing countries. It is reported that the United States has privately informed some TPP negotiating partners that they do not want China to participate. China is also advancing bilateral and multilateral free trade negotiations such as China, South Korea, China, Japan and Korea and the Regional Comprehensive Economic Partnership (RECP) in the Asia-Pacific region.

Mutual exploration

As far as the upcoming S&ED between China and the United States is concerned, the significance of communication and dialogue is far greater than the symbolic agreements and memoranda filled with diplomatic rhetoric.

Yao Jian, a spokesperson for the Ministry of Commerce, told reporters that Chinese Minister of Commerce Gao Hucheng will speak in a trade and investment group. The main economic topics of S&ED will also focus on trade, investment, financial system and economic restructuring.

In fact, China and the United States have recently launched a series of bilateral free trade negotiations. As far as the US side is concerned, the first round of negotiations between the US-European Transatlantic Trade and Investment Partnership Agreement (TTIP) has been launched. The next round of TPP negotiations will also be held in Malaysia from July 15th to 25th. Japan will be in the negotiations for the first time. Show up in the middle. On the Chinese side, the China-Switzerland Free Trade Agreement was officially signed in Beijing on the 6th. The second round of the China-Japan-Korea Free Trade Zone will be held in Shanghai from July 31 to August 2. The first round of RCEP negotiations has also been completed.

Since the content of these negotiations is confidential information, both parties are quite curious about each other's movements. Therefore, in this dialogue, it is expected that the two parties will disclose to each other some non-confidential information on the progress of their respective free trade negotiations.

He Weiwen said that from a broad perspective, the US's areas of concern include: China-US Bilateral Investment Agreements (BIT), intellectual property rights, network leaks and trade secrets, and market access. The Chinese side will focus on the cyber security brought about by the Snowden incident, the US high-tech export control to China, the barriers to Chinese companies investing in the United States, and the cooperation between China and the United States. He said that regardless of BIT or TPP, the ultimate goal of the US is to obtain greater access to the Chinese market. This kind of access is more about the open financial sector under capital.

Xing Houyuan, director of the Overseas Investment Research Center of the International Trade and Economic Cooperation Research Institute of the Ministry of Commerce, told this reporter that the US proposal to get national treatment before market access is contrary to China’s commitment to WTO, because it means that US companies have not yet invested in China. You can get the same national treatment as Chinese companies. In addition, the US hopes to use a negative list on the promised approach, which is an option not listed by the Chinese, and they can all enter the investment. These are all unacceptable to China.

China's time to join the TPP is far from mature

Experts say that no matter from which point of view, China's current timing of joining the TPP is far from mature.

Authorities revealed to our reporter that from the perspective of the United States, if China now joins the TPP, it will be involved in the rulemaking process.

Obama’s second term began to actively promote TIPP negotiations. Insiders revealed to reporters that the United States is also actively negotiating with Mexico to update the existing North American Free Trade Agreement (NAFTA). At present, TTIP, TPP and NAFTA are generally regarded as the "one body two wings" strategy of the United States.

It is worth noting that Japan, which is also an Asian country, will appear in the TPP negotiations for the first time in the middle of this month. However, Japan’s progress in joining the TPP is not smooth. US labor organizations and business groups have disagreed on Japan’s accession to the TPP on the 2nd of this month, which indicates that Japan’s participation in the TPP will face greater resistance in the US Congress. For China, if you join the TPP negotiations, the external resistance will inevitably be greater than that of Japan. Many people are worried that if they rush to join a negotiation with large internal differences and unclear circumstances, China is likely to be accused by some countries and interest groups as blocking the negotiators.

In fact, it is also controversial whether China will join the TPP. Some people think that they should insist on promoting trade negotiations under the multilateral sector (WTO) framework; others believe that in the face of the US's new trade framework strategy, if China wants to influence rulemaking, it should intervene early to promote domestic reform. . Some of the TPP standards, such as zero tariffs, state-owned enterprise reforms, the establishment of independent trade unions, environmental protection, intellectual property rights and other sensitive issues, are mostly unacceptable to China at this stage.