China trade pitch follows Australia’s AUKUS nuclear submarines deal

Australia to oppose Beijing’s bid to join one of world’s biggest trading pacts until it ends trade strikes against Australian exports.

Scott Morrison meets with Chinese President Xi Jinping during the G20 in Japan in 2019. Picture: Adam Taylor / PMO

Australia has put China on notice it will oppose Beijing’s bid to join one of the world’s biggest trading pacts until it calls off trade strikes against Australian exports and ­resumes minister-to-minister communications with the Morrison government.

China on Thursday formally applied to join Australia and the 10 other members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) – but will require the unanimous support of all of its members to be admitted.

Australian Trade Minister Dan Tehan said China could not join the grouping until it had convinced members of its “track ­record of compliance” with existing trade agreements and World Trade Organisation commitments, a process that would require Beijing to resume high-level dialogue with Australia.

Australia has lodged disputes against China in the WTO on ­restrictions on exports of barley and wine imposed by Beijing as ­relations between the two countries deteriorated.

“CPTPP parties would also want to be confident that an ­accession candidate would fully implement its commitments under the Agreement in good faith,” Mr Tehan told The Weekend Australian. “As we have conveyed to China, these are important matters which require ministerial engagement.”

China’s request to joint the CPTPP was made hours after Beijing denounced the Morrison government for its “irresponsible” plan to develop a fleet of conventionally armed nuclear-powered submarines and a missile program under a new trilateral security partnership with the US and UK.

China’s party-controlled media said the new AUKUS ­security agreement would ­“potentially make Australia a target of a nuclear strike”, citing unnamed Chinese military experts.

A menacing editorial in the Global Times, a tub-thumping party tabloid, added: “Australian troops are also most likely to be the first batch of Western soldiers to waste their lives in the South China Sea.”

The CPTPP, initially signed in March 2018, covers a market of 500 million people across 11 economies representing more than 13 per cent of the world’s GDP.

Before the US withdrawal from the pact in 2017, the deal was known as the Trans-Pacific Partnership and was positioned by the Obama administration as an ­attempt to counterbalance China’s economic clout.

Beijing has launched strikes on Australian exports that were worth more than $20bn a year, with the Morrison government responding by calling out Xi Jinping’s campaign of economic coercion and seeking to reduce reliance on the Chinese market.

In a major address earlier this month, Josh Frydenberg raised deep concerns about a “more confident and assertive China” that was “willing to use its economic weight as a source of political pressure”.

The Treasurer argued economic and security interests over China increasingly overlapped and that Australia was on the “frontline of this new battle ground” as he flagged the ­prospect of having to pay a “premium” to protect the economy and the nation’s long-term economic resilience.

China’s elevation to the CPTPP trade grouping would require the unanimous consent of members Australia, New Zealand, Japan, Singapore, Brunei, Malaysia, Vietnam, Mexico, Peru and Canada.

Singapore, Australia and Japan – which also has a fraught relationship with China – are on a committee of the key trade group that assesses potential new members, while New Zealand handles requests for membership.

The president of the Centre for China and Globalisation, Wang Huiyao, told The Weekend Australian that Canberra could ease its tensions with Beijing by allowing China entry into the CPTPP.

“It will also help to balance Australia’s relation with China and US, given Australia has just joined a regional defence framework with the US,” Dr Wang said.

He said that China’s formal application to join the higher-standard CPTPP was a “milestone event in China’s opening-up history” but said Beijing would need to improve its relationship with the Morrison government to be accepted. “In order to gain the support and recognition of Japan, Australia and other member states, China will also ease geographic competition with Japan, Australia and other countries, and jointly promote the implementation of CPTPP standards, adding more certainty to the prosperity and stability of the world economy,” Dr Wang said.

Richard Maude, executive ­director of Asia Society Australia and a former senior Australian diplomat, said he thought the bid was “very clever diplomacy from China”.

“It really strikes at one big weakness in America’s Indo-­Pacific strategy – its lack of a significant economic agenda and its absence from either of the big plurilateral trade deals that knit the region together,” he said.

China’s path to entry would also require the green-light from an Australian political system now deeply hostile to the rising power. The Liberal member for the seat Fairfax in Queensland, Ted O’Brien, said trade ­agreements were built on trust and urged Beijing to resume dialogue with the Morrison government.

“If I could provide some gratuitous advice to China: pick up the phone and engage with our Trade Minister,” Mr O’Brien said.

Trade experts are also sceptical about China’s ability to meet the trade group’s rules on state-owned enterprises, labour rights and the free flow of data. Jeffrey Wilson, research director at the Perth USAsia Centre, said it was “fantastical” that China would be accepted.

“The political space for Australia or Japan or Canada to agree to open the negotiations is zero,” Mr Wilson said.

Canada has also endured years of friction with Beijing after two Canadian citizens were detained in China in late 2018. The Trudeau government has ­accused Beijing of engaging in “hostage diplomacy”.