Why China Doesn’t Mind Being Left Out of the Trans-Pacific Partnership

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

 

The largest regional trade agreement in history involves the United States and 11 countries in the Asia Pacific and the Americas, which collectively represent about 40 percent of world GDP and around a quarter of global exports.

 

More than five years in the making, the TPP, as it is commonly referred to, was finalized on Monday, but it still needs the approval of lawmakers in member countries, including the US Congress.

 

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.

 

While a lot of the details of the deal are still secret, the TPP is clearly more than just a free trade agreement. In addition to slashing or eliminating 98 percent of tariffs on thousands of goods including dairy, beef, sugar, cars, tractors and chemicals, it also establishes common rules and regulations for trade and investment across member countries as well as external tribunals to sort out disputes.

 

TPP member states will include the United States, Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Chile and Peru. More countries are expected to join the exclusive trading club, but given the tough membership rules, China is not expected to sign up any time soon.

 

Read More: Why China Doesn’t Mind Being Left Out of the Trans-Pacific Partnership – NBC News