China considering to obtain TPP membership

YarnsandFibers News Bureau 2015-06-29 14:00:00 – Vietnam

China has ‘put out feelers’ to join the Asia-Pacific trade deal, as per the US media which is a breaking news but not a surprise at all for Vietnamese experts. China will not only need the nod of the US to join TPP but the community of 12 member countries, and China will have to negotiate with each of the 12 countries to obtain TPP membership. The countries will have the right to set conditions for China, and China will have to pay to join TPP.

Bui Kien Thanh, a renowned economist, noted that people have every reason to think that the main goal of a 12-member ‘without-China’ TPP agreement, expected to control 40 percent of the world’s trade, is to confront China. However, anything can happen in a time of globalisation.

The countries initiating the establishment of TPP want to set up a community which can serve as a counterbalance to China to protect them from China’s influence.

However, Obama has kept the door open to China joining TPP. Avoiding conflict is the prevailing principle in the world. Negotiations can be the key to problems.

According to Thanh, all TPP members have to follow the principles about human rights, respect for each other’s territorial sovereignty and navigation freedom. Being a member of an organization, one must respect the rules of the organization which will be set up by the organization’s members based on negotiations.

It is clear that TPP upholds the 12 countries’ interests and protects them from being blocked by China. But it is still unclear what price China will have to pay.

Vietnamese textile and garment enterprises have been using Chinese input materials to make finished products. However, when Vietnam joins TPP, they would rather buy input materials from TPP member countries to be able to enjoy TPP’s preferential tariffs. If so, China will lose an important customer - Vietnam.

China has been preparing well for this. It has relocated factories to Vietnam to make Vietnam-sourced products which can enjoy preferential tariffs.

Besides the TPP, the US has announced the launch of talks on the Transatlantic Trade and Investment Partnership with the 28-nation European Union, with the first round of negotiations due in early July. The two sides already have bilateral trade and investment worth nearly $5 trillion, the world’s largest.

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