Jaewon Jung is currently the Chair of the Department of International Trade at Dankook University, Korea, where he received his bachelor's degree from the Korea University of Foreign Studies, and later his master's degree and doctorate degree from Goryeo University, Korea, and the University of Paris, France, respectively, where he received top honours for his doctoral thesis entitled "Globalization and industrial delocalization". He was Professor of Economics at the Faculty of Business and Economics, RWTH Aachen University, Germany, for eight years. His monographs include The Impact of Regional Comprehensive Economic Partnership (RCEP) on Macroeconomic Stability (2018); The Industrial Effects of the Trans-Pacific Partnership (TPP) (2018); and The Impact of Korea-US FTA Renegotiations on Aggregate Productivity (2017).
New chapter for CPTPP : a membership list facing change and its global implications
The CPTPP was formerly known as the Trans-Pacific Partnership (TPP).In 2017, then U.S. President Donald Trump announced that he was withdrawing from the TPP, and the agreement was subsequently negotiated and renamed the CPTPP, led by Japan, which came into effect at the end of 2018. Currently, the CPTPP consists of 11 member countries, including Canada, Mexico, Japan, Australia, Vietnam, Singapore, and Malaysia, while the United Kingdom formally signed the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) recently, becoming the first European country to join the agreement. With China being the next country in line to join the CPTPP, SPCIS caught up with Prof. Jae-won Jung to ask him about the possible direction of the CPTPP and its possible impact on the global economy and politics.
On September 16, 2021, China has formally submitted its application to join the Comprehensive and Progressive Agreement on Trans-Pacific Partnership (CPTPP). As known, joining the CPTPP requires not only tariff elimination but also high standards on the overall trade and investment liberalization, including various regulations for free market access, labor rights, government procurement, etc. As many people anticipate, it seems quite unlikely that China meets easily all such high standards of the CPTPP and satisfy all the current CPTPP members. Though the negotiation process will not be easy, China’s membership bid for the CPTPP itself has, however, a very positive symbolic value and is giving a positive signal to other countries seeking free trade and free market access. The United Kingdom, who had submitted its application to join the CPTPP just before China, has just reached an agreement with the member countries on March 31, 2023, and will be soon the CPTPP’s 12th member. Now, China would be the next applicant in line to make an actual progress in the negotiation, together with Taiwan who had also submitted its application to join the CPTPP just one week later after the China’s membership bid. With the experience from the case of the UK, the negotiation process might be accelerated more than expected.
On the other hand, at least in a short term, it might be difficult for the US to return back to the CPTPP. President Biden has already clarified numerous times that he will first focus on domestic policy measures to build back the strength and resilience of the US economy rather than pursuing other trade agreements. However, recent polls reveal that American’s perspectives on trade and the CPTPP have been evolving considerably and the majority of Americans view trade as offering opportunities rather than threats. Though a growing camp of policymakers as well as members of the public are warming to the idea of the US’s rejoining the CPTPP, still many others remain strongly opposed and seem to believe that the CPTPP should first be modernized and reformed in favor of the interest of the US. In addition, on May 23, 2022, President Biden launched the Indo-Pacific Economic Framework for Prosperity (IPEF) to re-engage with its trading partners on the Pacific Rim, the fastest-growing and most dynamic region in the world. However, he has not entirely closed the possibility of the US’s rejoining the CPTPP. If China will succeed to join the CPTPP in addition to its leadership in the Regional Comprehensive Economic Partnership (RCEP), it seems to be inevitable that the US becomes less competitive and less influential in the region. It will depend on the success of the IPEF, but given that the IPEF does not provide any actual free market access measures, other countries will continuously ask for the US’s rejoining the CPTPP, and for the US it would be difficult to fully neglect such voices.
For the future development of the CPTPP, besides the UK who has just been accepted into the agreement, five other applicants – China, Taiwan, Ecuador, Costa Rica, and Uruguay – are in line for the next accession. Other countries, such as Korea, Thailand, Indonesia, and the Philippines, etc., have also expressed their interest in joining the CPTPP. The expansion process of the CPTPP is likely to continue “comprehensively and progressively”. The accession of the UK to the CPTPP may be a trigger for such broader expansion process. Depending on the success of the UK after the Brexit, more outside-region countries will also pay attention to the expansion of the CPTPP. Above all, depending on the China’s actual accession and the following strategical choice of the US, the expansion of the CPTPP will largely affect not only the regional economy but also the whole global economy. The success will depend primarily on the productivity effects coming from the consolidation of the global supply chain nexus and the reciprocal complementarity between the member countries. One recent work (Jung, 2023) focusing on such productivity effects assesses that China’s participation in the CPTPP may generate significantly higher productivity, GDP, and welfare effects than previous estimations. China’s accession to the CPTPP will imply much more things economically and politically, as well as regionally and globally.
Contact: Jiang Beilei
Interview: Jiang Beilei
Editor: Chao Wei