The Trans-Pacific Partnership (TPP) Agreement was concluded in October 2015, but still faces the challenge of ratification in each of the 12 member countries that are partners to the agreement. China, the world’s second-largest economy, is not part of the TPP agreement, which has provoked a great deal of debate within China on the best strategy for it to take to deal with the TPP. This paper discusses China’s possible trade strategy in light of the TPP, raising three issues for consideration.
First, security of market access should be China’s main concern in any free trade agreement (FTA) negotiation, but the TPP does not include content that is particularly relevant to this issue. Second, the final TPP agreement is somewhat less than the high-level, ambitious agreement that it has been proclaimed to be. Third, the ratification process in all 12 member countries will be slow, and may possibly not even happen in some countries. Four strategies for China are laid in this paper: to promote the development of China’s remaining regional and bilateral FTAs; to negotiate a bilateral FTA with the United States; to promote deep domestic reform and opening up by enlarging the coverage of the TPP; and, finally, to negotiate its entry in the TPP as soon as possible, so that the terms of entering the agreement do not degenerate for China.
