The U.S. and the CPTPP: How President Biden Can Reaffirm America's Commitments in the Indo-Pacific

President Biden and Japanese Prime Minister Fumio Kishida greet each other at COP26. Earlier this year, the two leaders met to discuss the future of U.S.-Japan cooperation in the Indo-Pacific. Photo courtesy of the Cabinet Secretariat of Japan. 

This September, China formally applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Its bid will likely be rejected, but for outside observers and even the Chinese Communist Party itself, acceptance into the agreement may not have been the primary reason for applying. Instead, the purpose of China’s bid is to refocus international dialogue around the economic balance of power in the Asia-Pacific, and implicitly criticize the credibility of the United States which, despite being the CPTPP’s own former architect, still hasn’t submitted its own application.  

A decade ago, U.S. foreign policy revolved around establishing and signing the Trans-Pacific Partnership, the CPTPP’s original iteration. Back then, the TPP was poised to become the largest free trade agreement in the world, covering 40 percent of the global economy. The Obama administration expected two core benefits from the TPP. First, by excluding China from a massive trade deal centered in its own backyard, the Obama administration hoped to pressure the CCP into enacting the stringent market, labor, and environmental reforms that were required of TPP member states. Second, and more importantly, the TPP was intended to firmly cement the U.S.’ committed presence in the Indo-Pacific and strengthen its Asian alliances. 

When former president Donald Trump withdrew the U.S. from the TPP in 2017, few were surprised. Fewer still expected the TPP to survive without the U.S. leading its negotiations. Its successful revival, renamed as the CPTPP, occurred against all odds and couldn’t have happened without Japan assuming leadership over trade talks. Japan is one of the U.S.’ oldest and most economically dominant Asian allies. Its place at the head of the CPTPP solidified its status as a critical economic counterweight to China, and as what the U.S. State Department calls “the cornerstone of U.S. security interests in Asia.” 

Given the U.S. and Japan’s close strategic relationship, when Joe Biden assumed the presidency, most observers expected him to immediately apply to join the CPTPP. In 2012, after being placed at the helm of navigating U.S.-China relations, he became the TPP’s biggest hype man, even in the face of opposition from his own party. He declared, “America is back,” shortly after his inauguration in 2021, signaling a break from his predecessor’s notorious isolationism. Moreover, he has made clear that his administration’s foreign policy priority is to counter the CCP economically, primarily through relying on international alliances. Thus, the U.S. had all the incentive to join the CPTPP—a deal that was the centerpiece of Biden’s own former foreign policy in Asia. 

But after entering office, President Joe Biden holds a remarkably different perspective towards U.S. presence in Asia than he did eight years ago. He has shown little inclination towards developing closer economic ties with Asian allies, even as he negotiates large-scale security agreements in the region like the Quad and AUKUS alliances. While President Biden has stated that he’s open to renegotiating parts of the CPTPP, he hasn’t acted to make his rhetoric a reality.

His reluctance is a mistake. When analyzing the costs and benefits of joining the CPTPP, the Biden administration has overlooked how entering the agreement benefits Japan, and subsequently the U.S. as one of its most important allies. Invariably, stronger alliances are better ones. Notably, Japan’s position as the U.S.’ “cornerstone” is not as secure as the Biden administration would like to believe. Economically and strategically compelled to balance its relationships with the U.S. and China, Japan’s diplomatic position is increasingly growing more treacherous. Japan has repeatedly signaled to the U.S. that it expects the U.S. to rejoin the CPTPP to strengthen their economic relationship and share the burden of promoting free trade in Asia once more. Every second the Biden administration leaves the issue unresolved, it leaves one of the U.S.’ most important allies unsatisfied and weakened. The U.S. should begin negotiations to join the CPTPP, and recognize that the indirect benefits derived from aiding Tokyo are enough to justify reentering the multilateral trade agreement. 

Threading a Closed Needle: the Untenability of Strategic Ambiguity

Biden’s stance towards China is even more hardline than his notoriously-combative predecessor’s. He has maintained former president Trump’s tariffs on Chinese goods and the U.S.-China Phase One trade deal. Moreover, the U.S. continues to characterize China’s economic actions as increasingly belligerent, tactical, and outright threatening to the U.S.’ position in the global world order. Most crucially, President Biden has maintained the Trump-era push towards economically and technologically decoupling the U.S. and China, detangling global supply chains, limiting cross-country investment, and stemming the flow of information. While the two economies still remain deeply intertwined, the decoupling movement rhetorically creates two separate, distinct spheres of influence. The major difference between administrations, then, does not lie in their beliefs but rather, in their methodology. Rather than acting unilaterally, President Biden seems determined to work closely with allies as he widens the distance between his country and China. 

Japan has long maintained a strategic sense of ambiguity in its foreign policy, particularly when regarding its relationship with China and the U.S. It promotes free trade and democratic values in the Indo-Pacific region, has enacted somewhat stricter laws on trade between it and China, and even joined the U.S. in essentially banning the Chinese technology companies Huawei and ZTE at a time when several U.S. allies refrained from doing so. However, Japan has simultaneously hesitated to confront the CCP over sensitive issues such as its repression of Uyghers in Xinjiang or the adoption of the widely-criticized security law in Hong Kong. 

Japan practices strategic ambiguity largely out of necessity. Even as the world’s third largest economy, its GDP still lags far behind those of China and the U.S. If retaliated against by either of the two countries—which are also its top two trading partners—Japan’s economy would naturally suffer. Moreover, even as it tries to upgrade its military, Japan still heavily relies on the U.S. for national security purposes. Spurning the U.S. would thus leave Japan vulnerable at a time where the potential for outright military confrontation in the Indo-Pacific continues to grow. Thus, Japan must delicately “thread the needle” between the U.S. and China. 

But as hostilities between Washington and Beijing continue to escalate, both countries have increasingly pressured international onlookers to pick a side. Countries that previously exercised strategic ambiguity have found that their old tactic of occupying the middle ground no longer functions when the U.S. and China’s spheres of influence grow increasingly separated. For example, Washington has framed the conflict over whether European countries should allow Huawei to provide 5G technology in binary terms: Europe either supports the U.S. or buys from China. 

As for the CCP, its reaction to Australia publicly calling for a probe into the origins of the novel coronavirus offered a preview for how it would respond to another diplomatic insult. China levied severe sanctions on Australian goods, and Chinese investment in Australia fell by 61 percent in 2020. Before this incident, Australia utilized strategic ambiguity in its diplomacy, just like Japan. Tokyo will undoubtedly keep the dramatic deterioration of Sino-Australian relations in mind as it considers its next steps. 

As the U.S. continues to pressure Japan to choose a side, it must recognize that for Japan to make a diplomatic commitment of that magnitude, America must be prepared to make commitments of its own.

The CPTPP’s Benefits Beyond U.S. Borders

Like the U.S., China is searching for allies to support it in the two countries’ rivalry. The CCP’s traditional model of diplomatic policy rests upon cultivating alliances through offering economic benefits, such as trade deals and investments. China holds a uniquely high degree of economic leverage in Asia, and economic dependency commonly serves as a more powerful motivator than the U.S.’ own model of appealing to goodwill and shared democratic ideals. 

But now, China is increasingly looking towards cultivating friendlier strategic alliances as the potential for conflict rises in the South China Sea. The CCP even began engaging with Japan. In 2018, former Japanese prime minister Abe Shinzo met with CCP President Xi Jingping for a three-day visit—the first of its kind since 2011. Former prime minister Abe did so because, as tensions between the U.S. and China escalated, he feared that the Trump administration would leave Japan out in the cold as it was buffeted by the shockwaves of the U.S.-China trade war. Warmer relations with China theoretically helped insulate Japan from the worst of the economic impact. 

The precedent thus exists for Japan to pivot towards China when it feels that the U.S. is prioritizing its economic goals at the expense of Japan’s economy. Unfortunately, President Biden risks cultivating this very scenario. 

Biden continues to maintain U.S. trade actions that actively undercut Japan’s economy. Former president Trump pressured Japan into signing an uneven trade deal in 2019 using threats of levying a 25 percent tariff on Japanese automobiles. In exchange for granting the U.S. virtually unimpeded access to valuable Japanese agricultural markets, Japan received reductions on duties imposed on musical instruments and bicycles. President Biden has declined to address the flaws within this agreement. He also will not lift the Trump administration’s high tariffs on Japanese steel and aluminum exports, which were imposed arbitrarily and abruptly. Current U.S. policy actively sacrifices Japan’s economy to further U.S. economic growth—satisfying the first of the two conditions that existed when Japan initially sought closer relations with China in 2018. 

The current rhetoric in Washington is that Japan is a steadfast ally that will stick with the U.S. no matter what. But such thinking lulls the U.S. into a sense of complacency. The reality is, if the U.S. neglects to reaffirm its commitment to the U.S.-Japan relationship, especially by refusing to join the CPTPP, it risks losing Japan as a key strategic ally and the cornerstone of its Indo-Pacific foreign policy. 

Moreover, Japan and the CPTPP need the U.S. to bolster the agreement’s effectiveness in promoting the rules-based free trade values it was designed to champion. Since its earliest inception, the (CP)TPP was intended to serve as the primary counterweight to Chinese economic influence in the Indo-Pacific region. In the eyes of both Washington and Beijing, Chinese economic centrality in the Indo-Pacific is the most effective channel through which the CCP can accomplish its goals of cultural and political hegemony. The U.S. thus believes that the best way to counter China is through economic avenues.

But in the U.S.’ absence, the CPTPP has become overshadowed by another multilateral Asia-based trade agreement led by China. Taking effect next January, the Regional Comprehensive Economic Partnership covers 30 percent of the global economy as the largest free trade deal not only in Asia, but the world. In a reversal from the CPTPP, it excludes the U.S and includes China. Its creation also enables future trade deals and strategic cooperation between member states, further integrating China into the Indo-Pacific. 

In its current state, the CPTPP does not hold enough economic clout to effectively counter China’s economic leverage, now that it’s outweighed and outnumbered by the RCEP. This makes Japan’s job of promoting a rules-based free trade alternative to China as the head of CPTPP increasingly difficult. But the RCEP’s scope is less ambitious than the CPTPP’s, and its provisions on labor, the environment, and manufacturing standards are less numerous and solidified. In theory, the CPTPP is more attractive than the RCEP; it just lacks the RCEP’s economic bulk. As the world’s largest economy, the U.S.’ presence would almost triple the magnitude of the CPTPP by joining. After all, the TPP would have spanned 40 percent of the global economy if ratified in its original iteration. By joining, the U.S. would bolster the CPTPP’s viability as a legitimate alternative to deeper integration with China, easing the burden on Japan and ultimately furthering the U.S.’ own goals of economically countering the CCP. 

Relations with CPTPP member countries already constitute a crucial portion of U.S. trade—amounting to over $1.8 trillion in 2020—and joining the agreement would lead to the removal of over 18,000 tariffs on U.S. goods. Consequently, the Peterson Institute for International Economics estimated in 2016 that joining the TPP would net the U.S. an annual real income increase of $131 billion, or 0.5 percent of its GDP, the largest benefit derived out of all countries involved. However, when weighed against concerns regarding losses in manufacturing jobs, the costs and benefits of joining the CPTPP seem about evenly matched. While the direct economic benefits to the U.S. might not be large enough to garner support amongst the Democratic Party, the narrative drastically changes when factoring in the aforementioned strategic benefits of joining the CPTPP. Reaffirming the U.S.’ relationship with what is perhaps its most important Asian ally and tangibly countering the CCP far outweighs the potential hit to the American economy that opponents to the CPTPP fear. Despite his protectionist economic policies, President Biden should not forget that he took office also intending to increase coordination with allies and heighten the U.S.’ engagement on the international stage. 

Furthermore, Japan recently began taking steps towards breaking its longstanding strategic ambiguity regarding China. Encouraged by this development, the U.S. is now expected to discuss and request Japan’s support in challenging the CCP on issues such as its aggression in the Taiwanese Strait and treatment of Uyghurs. But for Japan to agree, the U.S. must concretely reaffirm its commitment to the two nations’ alliance, and sign the CPTPP to demonstrate its desire to stay involved in the Indo-Pacific. 

Next Steps: How Biden Should Frame Joining the CPTPP

Of course, the CPTPP isn’t perfect. Several of the original criticisms levied against the TPP by progressives in 2015—including the fact that its text won’t be available to the public, as well as its rather vague environmental and labor clauses, favoring of global corporations, and disagreements over intellectual property rules—still hold merit today. However, the best way to address these concerns is for the U.S. to enter the CPTPP itself. It cannot amend certain provisions and strengthen others without a seat at the table. 

While the current public attitude toward international trade deals in the U.S. seems hostile, 89 percent of Americans now consider China to be a major competitor, and 70 percent want the U.S. to confront the CCP over its human rights policies. If President Biden can effectively communicate that joining the CPTPP will enable the U.S. to successfully do just that, he’ll find that the popular will to join the agreement is present. At the end of the day, President Biden must realize that his focus on prioritizing the American economy should not directly undermine his strategic policy—and that it doesn’t have to. Ultimately, he must view joining the CPTPP through a fundamental tenet of international allyship: oftentimes, helping allies means helping the U.S. too. 

Yvin Shin is a staff writer at CPR and a first year studying Economics-Political Science at Columbia College. Her Cafe East order is a medium milk tea with tapioca.