Global Post, 9 October 2015. Why China doesn’t mind being left out of the Trans-Pacific Partnership, by Alison Jackson.

An edited extract of the original article is reproduced below.

In case you hadn’t heard, the Trans-Pacific Partnership is a really big deal — unless you’re China…

Given the importance of the accord, which is designed to boost cross-border trade and investment among member countries and, ultimately, economic growth, it might seem strange that China, the world’s second largest economy and biggest trading nation on the planet, has been left out…

Excluding China has been widely interpreted as an attempt by the United States to curtail Beijing’s growing political and economic might in the Asia Pacific region, and some experts have described it as a “terrible mistake.”

But does Beijing really care? Possibly not as much as you might think.

For starters, China doesn’t need to belong to the TPP to enjoy some of the perks that come with being a member.

Beijing already has free trade agreements with more than half of the TPP countries, including Australia, New Zealand, Chile, Peru, Singapore, Brunei and Vietnam, and it can exploit those arrangements to minimize or avoid import duties that would normally apply to made-in-China products…

“To satisfy certain country­-of-­origin conditions stipulated in TPP, China can manage the supply chain operations of cotton shirts by importing cotton from Pakistan (via its existing free trade agreement with China) and conduct ‘upstream’ operations, such as fabric design, knitting and dyeing at home.

“Then China can ship the fabric to Vietnam (via an existing free trade agreement with China). At the same time, Japan can ship the buttons to Vietnam (via the TPP). Vietnam can perform ‘downstream’ operations (sewing) and then ship the finished shirts via TPP agreement to Australia, Japan and the United States, cutting off the 5%, 10.9% and 16.5% import duties that would have applied if China had dealt directly with these countries.”…

To view the original and unedited article, click onto Why China doesn’t mind being left out of the Trans-Pacific Partnership, by Alison Jackson, Global Post.

 

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