Potential Impact of CPTPP Expansion on Red Meat Trade
China’s recent announcement of its application for membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is generating considerable attention.
“Within a week of each other, China and Taiwan filed formal applications to join the agreement,” says Joel Haggard, U.S. Meat Export Federation's (USMEF) senior vice president for Asia-Pacific. “CPTPP members have maintained an open attitude and have invited other like-minded parties to join.”
The UK, for example, applied for membership in early February and formal accession talks started about a month ago, he says. Other economies that have expressed an interest in joining include the Philippines, South Korea, Thailand and Indonesia.
How Would China Fit?
Optimists argue that China's entry into CPTPP would catalyze the reforms that China has long said it would carry out, including selling off or reforming its state-owned enterprises, enforcing intellectual property rights and opening its financial markets, Haggard notes.
“China is already the world's largest meat importer, and the market still has enormous potential for growth, so its application for membership holds significant appeal for prospective suppliers,” he says.
But in order to gain approval from CPTPP members, China would likely be required to reduce import duty rates and address non-tariff trade barriers for red meat imports, Haggard says.
“Just looking at the narrow area of the meat trade, China already has FTAs with Australia and New Zealand. Duties are zero for New Zealand. Red meat imports into China are already quite low for Australia, but exporters like Canada and Mexico would expect lower duties,” he says.
CPTPP members have so much to potentially gain from China's membership, so its application should be taken seriously, Haggard adds.
“But there are other meat trade issues beyond tariffs,” he says. “Australia currently has major access problems for some of its ag exports to China, including beef. Now one would think those would have to be addressed. Suppliers may also demand more streamlined access procedures for meat plants, such as under the U.S.-China Phase One Agreement.”
At the end of the day, China will have to address these market access demands from all members and for all commodities of interest.
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