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It’s Time for Canada to Break the CPTPP Accession Logjam

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In mid-April, senior officials from the 12 members of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) will convene in Toronto to review progress made by the CPTPP since its inception 5 years ago. Since then, all the original 11 signatories have ratified and implemented the Agreement and the UK has been accepted for membership, although its internal implementation process is still underway. Among other things, the CPTPP Commission senior officials, meeting with Canada as Chair, will begin work on the General Review of the Agreement, the terms of reference for which were finalized at the meeting of CPTPP Ministers in San Francisco last November.1https://www.mfat.govt.nz/assets/CPTPP/Terms-of-Reference-for-the-CPTPP-General-Review-November-2023.pdf; accessed March 21, 2024 The scope of the review will include a root and branch assessment of how the Agreement is working to ensure that business takes full advantage of its provisions, and that it remains of the highest possible standard.

With the ongoing problems of the World Trade Organization (WTO) where consensus on addressing problems ranging from dispute settlement to agricultural subsidies has proven elusive, the disciplines incorporated into an important and wide ranging plurilateral agreement like the CPTPP have become even more important. In addition to reviewing how the Agreement is working and considering whether to add new chapters covering additional topics, Commission officials need to decide on how to address the pending applications of six aspirant economies, China, Taiwan, Ecuador, Costa Rica, Uruguay and Ukraine. Others such as Korea, Thailand and the Philippines have also expressed a general interest in joining, without having formally submitted accession requests.

With the ongoing problems of the WTO where consensus on addressing problems ranging from dispute settlement to agricultural subsidies has proven elusive, the disciplines incorporated into an important and wide ranging plurilateral agreement like the CPTPP have become even more important.

It is perhaps trite to observe that not all these economies are fully ready to assume the gold-standard trade obligations of the CPTPP in the short term, but indeed some have taken or are taking the necessary steps to be in full compliance with the Agreement once their membership application is accepted. Amongst these is Taiwan which, along with China, is the next in line to be considered from a chronological perspective having applied in September of 2021. China applied a few days earlier in the same month. Doubts have been expressed as to whether China is willing or able to take on all of the CPTPP disciplines,2“The CPTPP Bids of China and Taiwan: Issues and Implications”, Hugh Stephens and Jeff Kucharski Canadian Global Affairs Institute, November, 2022; https://www.cgai.ca/the_cptpp_bids_of_china_and_taiwan_issues_and_implications but no one will know for certain until the accession process starts. The same could be said to apply to other aspirants.

To date, CPTPP members have focused their efforts on completing the ratification process for several of the original signatories who took longer than others to pass legislation implementing the Agreement (Canada was among the first six economies to ratify, thus bringing the Agreement into effect on December 30, 2018), and on finalizing the UK’s accession. That work is now complete, or virtually complete, and it is time to address the pending membership issue.

According to the CPTPP’s published accession process document,3https://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/cptpp-ptpgp/accession_process-processus_adhesion.aspx?lang=eng; accessed March 21, 2024 the Commission will determine, “within a reasonable period of time after the date on which the aspirant economy made the Accession Request” whether to commence the process. This decision will be taken by consensus (Article 2.1). Benchmarks that aspirant economies must meet are set out in the document. Prior to the formal step of beginning accession, aspirants are encouraged to have consultation with each Party, “with a view to addressing each Party’s questions or concerns on interested areas”. (Article 2.2). These consultations are not considered to be part of the negotiating process, nor are they subject to the consensus rule, according to the CPTPP’s published accession process document. Yet to date, Taiwan for one has been unable to take even the first steps toward accession, i.e. beginning the informal Article 2.2 discussion process, because each time Taiwanese officials have approached a CPTPP member to offer to begin consultations, they have apparently been rebuffed on the basis that consensus among the existing membership is required.

This is a smokescreen. The accession document is quite clear that the consensus process (Article 27.3 of the Agreement) applies only to Article 2.1, and to a decision to commence the formal accession process by striking an Accession Working Group. Under Article 2.2, aspirants are encouraged to reach out to individual members as part of a preliminary process “for the purpose of smoothly carrying out subsequent Commission and Accession Working Group discussions”. To block the process at its most initial stage using the “lack of consensus” argument, when the market access offers of the aspirant economy have not even been presented or discussed, is both non-transparent and defeats the whole purpose of preparing for formal accession negotiations through advance preparation and dialogue.  

Each time Taiwanese officials have approached a CPTPP member to offer to begin consultations, they have apparently been rebuffed on the basis that consensus among the existing membership is required. This is a smokescreen.

It is not difficult to surmise why some, or perhaps all, CPTPP members have been shy to engage with Taiwan, even informally under the 2.2 rubric. That reason is China. China has opposed Taiwan’s accession from the outset,4“China blasts Taiwan’s bid to join CPTPP trade pact”; Lauly Li and Cheng Ting-fang, Nikkei Asia, September 23, 2021; https://asia.nikkei.com/Economy/Trade/China-blasts-Taiwan-s-bid-to-join-CPTPP-trade-pact even though it is not itself a member of the CPTPP, and arguably might not meet the requisite benchmarks to join. Were it a member it could block consensus, but it is not. It is unprecedented for a non- member to seek to block the application of another non-member, but that is what seems to be happening. Canada’s public position regarding accession of potential new members, including Taiwan, is that it “supports the expansion of the CPTPP to include economies that are willing and able to comply with the Agreement’s high standards, and have a demonstrated history of compliance with their trade obligations”.5Minister of Export Promotion, International Trade and Economic Development appearance before the Standing Committee on International Trade (CIIT) on the subject matter of Bill C-57, An Act to implement the 2023 Free Trade Agreement between Canada and Ukraine; https://www.international.gc.ca/transparency-transparence/briefing-documents-information/parliamentary-committee-comite-parlementaire/2023-11-07-ciit.aspx?lang=eng; accessed March 21, 2024 That would appear to qualify Taiwan, and possibly others, but it will not be possible to ascertain readiness if the informal consultation mechanism offered by Article 2.2 continues to be blocked.

Canada, as current CPTPP Chair, has an obligation and an opportunity to resolve this impasse. Along with starting work on the General Review, the Commission should agree that any CPTPP member can commence informal 2.2 consultations with any aspirant economy without reference to the consensus requirement (CPTPP Article 27.3), leaving this as a strictly bilateral decision in the first instance. There is no need for consensus at this point because entering 2.2 discussions involves no commitments or obligations. It is simply a fact-finding exercise and exchanges of information.

A further step in this direction could be to make it obligatory for current members to respond to an aspirant’s request for informal consultations within a reasonable period of time. Without an obligation to respond substantively and in a timely fashion, the information gathering process foreseen by Article 2.2 could be dead before it even begins. Aspirant economies should not be arbitrarily denied the opportunity to enter into meaningful dialogue with CPTPP members. Refusing to answer the knock at the door is not consistent with the self-professed objectives of the CPTPP to “Promote transparency, good governance and the rule of law”.6CPTPP Agreement, Preamble, https://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/tpp-ptp/text-texte/00.aspx?lang=eng; accessed March 21, 2024

Even if the 2.2 logjam is broken–and Canada could make a major contribution to the CPTPP as Chair by taking this on and achieving internal agreement to the changes described above–there will still be a long process to complete accession for Taiwan, China, or any other aspirant economy. Given limited negotiating resources, it may be that aspirants should be grouped by degree of readiness, as ascertained by Article 2.2 discussions, in a “green/yellow/red” scenario, with the pace of accession negotiations adjusted accordingly. We would not presume to judge which economies would fall into which category; that is the purpose of the preliminary consultations and why it is so important that they be allowed to proceed without hindrance.

One option for consideration is for aspirant economies to be invited to become dialogue partners as they proceed through the process.7“The CPTPP Bids of China and Taiwan: Issues and Implications: An Update”, Hugh Stephens and Jeff Kucharski, Asia Pacific Foundation of Canada, January 16, 2024; https://www.asiapacific.ca/publication/cptpp-bids-of-china-and-taiwan-issues-and-implications-update This could allow them, for example, to attend meetings as observers while the accession process is underway, including Article 2.2 discussions. This would facilitate contact, build capacity, help develop consensus and identify areas of agreement and disagreement. Establishing a sort of “waiting room” for all aspirant economies would help break the current stasis and move the accession process forward, allowing those that clearly meet the benchmarks and have the capacity to fully engage to move ahead to potentially move faster than others.

As the second largest economy in the CPTPP, and as current Chair, Canada has an important role to play in leadership to clear the accession logjam.

While consideration of some sort of dialogue partner or observer status should be considered during Canada’s year as Chair in order to move the accession process forward, the most immediate need is to clarify that commencement of informal discussions under Article 2.2 is a prerogative of individual members, and that members should be required to respond in good faith and within a reasonable period of time to approaches from aspirant economies to begin such discussions. As the second largest economy in the CPTPP, and as current Chair, Canada has an important role to play in leadership to clear the accession logjam.

Authors
Hugh Stephens
Hugh Stephens
Hugh Stephens is an Advisor at the Institute for Peace & Diplomacy, a Distinguished Fellow at the Asia Pacific Foundation of Canada, and a former Assistant Deputy Minister for Policy and Communications at Foreign Affairs and International Trade.
Tim Sargent
Tim Sargent
Tim Sargent is a Distinguished Fellow at the Centre for International Governance Innovation and a former Deputy Minister of International Trade.
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Peggy Mason: Canada’s former Ambassador to the UN for Disarmament

Mark Fitzpatrick: Associate Fellow & Former Executive Director, International Institute for Strategic Studies (IISS)

Ali Vaez: Iran Project Director, International Crisis Group

Negar Mortazavi: Journalist and Political Analyst, Host of Iran Podcast

David Albright: Founder and President of the Institute for Science and International Security

 

Closing (5:45 PM – 6:00 PM ET)

Panel 3: Trade and Business Diplomacy in the Middle East (3:00 PM - 4:15 PM ET)

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Hon. Sergio Marchi: Canada’s Former Minister of International Trade

Scott Jolliffe: Chairperson, Canada Arab Business Council

Esfandyar Batmanghelidj: Founder and Publisher of Bourse & Bazaar

Nizar Ghanem: Director of Research and Co-founder at Triangle

Nicki Siamaki: Researcher at Control Risks

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Luciano Zaccara: Assistant Professor, Qatar University

Dania Thafer: Executive Director, Gulf International Forum

Kayhan Barzegar: Professor and Chair of the Department of Political Science and International Relations at the Science and Research Branch of Azad University

Barbara Slavin: Director of Iran Initiative, Atlantic Council

Sanam Shantyaei: Senior Journalist at France24 & host of Middle East Matters

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Abdullah Baabood: Academic Researcher and Former Director of the Centre for Gulf Studies, Qatar University

Trita Parsi: Executive Vice-President, Quincy Institute for Responsible Statecraft

Ebtesam Al-Ketbi: President, Emirates Policy Centre​

Jon Allen: Canada’s Former Ambassador to Israel

Elizabeth Hagedorn: Washington correspondent for Al-Monitor

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Erica Di Ruggiero: Director of Centre for Global Health, University of Toronto

Reyhana Patel: Head of Communications & Government Relations, Islamic Relief Canada

Amir Barmaki: Former Head of UN OCHA in Iran

Catherine Gribbin: Senior Legal Advisor for International and Humanitarian Law, Canadian Red Cross

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Ferry de Kerckhove: Canada’s Former Ambassador to Egypt

Dennis Horak: Canada’s Former Ambassador to Saudi Arabia

Chris Kilford: Former Canadian Defence Attaché in Turkey, member of the national board of the Canadian International Council (CIC)

David Dewitt: University Professor Emeritus, York University

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Dmitri Trenin: Director of Carnegie Moscow Center

Joost R. Hiltermann: Director of MENA Programme, International Crisis Group

Roxane Farmanfarmaian: Affiliated Lecturer in International Relations of the Middle East and North Africa, University of Cambridge

Andrew A. Michta: Dean of the College of International and Security Studies at Marshall Center

Kelley Vlahos: Senior Advisor, Quincy Institute

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Sanam Vakil: Deputy Director of MENA Programme at Chatham House

Denise Natali: Acting Director, Institute for National Strategic Studies & Director of the Center for Strategic Research, National Defense University

Hassan Ahmadian: Professor of the Middle East and North Africa Studies, University of Tehran

Abdulaziz Sagar: Chairman, Gulf Research Center

Andrew Parasiliti: President, Al-Monitor