Thayer Consultancy Background Brief:

ABN # 65 648 097 123

Vietnam and Taiwan’s
Application to Join the CPTPP
October 16, 2021

Taiwan recently filed an application to join the Comprehensive and Progressive Trans-
Pacific Partnership (CPTPP). China is trying to prevent Taiwan from joining the CPTPP.
Taiwan’s application to join the CPTPP requires the consent of eight member states
(Malaysia, Brunei and Chile have no right to decide).
Among the eight members, Japan, Australia and Canada are all likely to support
Taiwan’s application to join the CPTPP.
Singapore and New Zealand have already signed free trade agreements with Taiwan,
so their motivation for opposing Taiwan is not strong.
Mexico is unlikely to oppose Taiwan’s membership because of the influence of the
United States.
This means that to prevent Taiwan from joining the CPTPP China must persuade either
Vietnam or Peru.
How will Vietnam handle Taiwan’s application to join the CPTPP? Will Vietnam oppose
Taiwan’s participation in the CPTPP?
ANSWER: It is in Vietnam’s interest to see both China and Taiwan successfully join the
Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) as this will result in
better terms of trade. Taiwan is more qualified at this stage to become a member as
it is already carrying out domestic reforms to conform to CPTPP standards. Now that
Taiwan has lodged a formal request for membership Vietnam can contact Taiwan to
discuss issues of concern including market access.
Under CPTPP rules, Vietnam can “have its cake, and eat it too.” Vietnam can avoid
incurring China’s wrath by staying silent and not openly support Taiwan’s
membership. This can be left to Australia, Canada, Japan and New Zealand. All
Vietnam has to do to support Taiwan’s membership is to adopt a low-key posture and
not formally object. The CPTPP works on the basis of consensus and by not objecting
to Taiwan’s membership Vietnam is signalling that will go along with those states who
support Taiwan.
If any one of the eight states that has ratified the CPTPP objects to Taiwan’s
membership, that will be the end of the matter. In such circumstances, Vietnam will
not have to show its hand.
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It must be pointed out that the CPTPP has no experience in dealing with requests for
membership. Now it has three on it plate – United Kingdom, the People’s Republic of
China and Taiwan.
The CPTPP is an “open architecture” agreement. Article 30.4 declares that “any state
or separate customs territory that is a member of APEC” is eligible for membership on
the proviso that the applicant is able to comply with the CPTPP’s rules and procedures.
Taiwan is a long-standing member of APEC.
Both China and Taiwan joined the World Trade Organisation. Taiwan joined as a
“Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu,” the same status
accorded to Hong Kong and Macau.
The eleven members who joined the CPTTP agreed on the following procedural steps
for membership in January 2019:1
A state or separate customs territory must make a formal application for membership.
Taiwan formally applied for membership on 22 September 2021 and New Zealand
currently has responsibility for handling this request.
Each member of the CPTPP is expected to determine its position on Taiwan’s
membership through its internal processes and through consultations with other
CPTPP members. CPTPP members individually may consult with Taiwan to clarify any
issues of concern.
Next, only those members that have ratified the CPTPP can participate in deliberations
to set up an official Working Group. Eight of the CPTPP’s eleven members have ratified
this agreement: Australia, Canada, Japan, Mexico, New Zealand, Peru, Singapore and
Vietnam. A single member can block the establishment of the Working Group.
Otherwise, the Working Group operates on the basis of consensus.
If consensus is reached and a Working Group is set up, the Working Group would
initiate discussions with Taiwan. In the recent case of United Kingdom, it formally
applied for membership in February, a Working Group was set up in June and
negotiations are currently underway.
Brunei, Chile and Malaysia have not yet ratified the CPTPP and thus cannot formally
participate in the proceedings.
There is no time limit set on these negotiations but it would be in Taiwan’s interest to
deal with questions and concerns about its ability to comply with CPTPP regulations
expeditiously and make market access offers.
It is been widely reported in the media that Taiwan made its interest in joining the
Trans-Pacific Partnership known before the final CPTPP agreement was negotiated.
Taiwan also has undertaken several domestic reforms to expedite its ability to comply
with the CPTPP.
Taiwan has already entered into informal bilateral discussions with several CPTPP
members. On 30 September, for example, the Council of Taiwanese Chamber of

1
Shannon Tiezzi, “Wendy Cutler on China, Taiwan, and the CPTPP,” The Diplomat, October 5,
2021; https://thediplomat.com/2021/10/wendy-cutler-on-china-taiwan-and-the-cptpp/.
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Commerce in Vietnam canvassed its two-hundred members in preparation for a

report to be submitted to Ministry of Industry and Trade’s Vietnam Business Forum
asking for Vietnam’s support for Taiwan’s membership in the CPTPP.
On 12 October, Elliott Charng, the head of the Taipei Economic and Cultural Office in
Canberra, met with the Australian Parliament’s Trade Sub-Committee of the Joint
Standing Committee on Foreign Affairs, Defence and Trade and asked for Australia’s
support for Taiwan’s membership in the CPTPP.2
Once formal negotiations have concluded, the Working Group is required to submit a
report to the CPTPP Commission consisting of all eleven members. Japan is the current
chair of the CPTPP. The final decision whether or not to admit Taiwan is made by
consensus of those states that have ratified and brought the CPTPP into force.
Vietnam has plenty of scope “to go with the flow,” that is to follow consensus. Vietnam
can either indicate its approval for Taiwan’s membership or not voice any objections.
Vietnam’s official position was laid out at the 17th regular press conference by a
spokesperson for the Ministry of Foreign Affairs on September 23rd, 2021 in this
exchange:
7. Phoenix: After China’s submission of an official request to accede to the CPTPP, Chinese Taipei
also announced that they had requested to accede to this Agreement. What is Viet Nam’s
response to this?
As I have mentioned, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership
is an open free trade agreement. CPTPP members have also agreed on the regulations regarding
the States and separate customs territory, criteria, and procedures for accession. Viet Nam will
closely consult with the other CPTPP members on these requests for accession.3

Suggested citation: Carlyle A. Thayer, “Vietnam and Taiwan’s Application to Join the
CPTPP,” Thayer Consultancy Background Brief, October 16, 2021. All background
briefs are posted on Scribd.com (search for Thayer). To remove yourself from the
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Thayer Consultancy provides political analysis of current regional security issues and
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2
Previously, the Trade Sub-Committee heard from the Australia-Taiwan Business Council, the
Taiwanese Chamber of Commerce in Australia, Taiwanese Chambers of Commerce in Oceania,
the Australia New Zealand Chamber of Commerce in Taipei, Chinese International Economic
Cooperation Association Taiwan, the CPC Corporation Taiwan, and the Bankers Association of
the R.O.C. (Republic of China).
3
https://www.mofa.gov.vn/en/tt_baochi/nr140808202328/ns210924221703.
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APPENDIX
I wrote down some information that I currently know as following. Although there are
no insights.
Due to China's pressure, it has always been difficult for Taiwan to sign trade
agreements with other countries. Even during the Ma Ying-jeou administration, where
the bilateral relationship between China and Taiwan was the best, Malaysia, which
was in contact with Taiwan for FTA negotiations, was still warned by China.
In Taiwan’s internal assessment, Peru is the country most likely to oppose Taiwan’s
accession to the CPTPP, because Peru now has very close diplomatic and economic
relations with China. Taiwan may need to use Japan and the United States to exert
pressure on Peru to have a chance to prevent Peru from speaking out against
Taiwan’s accession to the CPTPP.
Vietnam’s movement is very vague. When a reporter asked about Taiwan’s accession
to the CPTPP at a press conference of the Ministry of Foreign Affairs of Vietnam on
September 23, the spokesperson of the Ministry of Foreign Affairs Le Thi Thu Hang
only stated that "this is an open agreement, the members of the CPTPP have also
agreed on rules on issues, standards and regulations, as well as procedures for
joining." "Vietnam will consult closely with other members of the CPTPP on proposals
to join the agreement." For Taiwan, such a vague answer is not a bad sign, but it does
not necessarily mean that things are optimistic. Especially recently, Beijing has
provided Vietnam with a large number of vaccines to help Vietnam through the most
difficult period of the epidemic.
Taiwan and Vietnam have a long-term and close trade relationship. In 2020, Taiwan is
Vietnam’s fifth largest trading partner, with a total bilateral trade of US$21022.5
million (in contrast, China is Vietnam’s largest trading partner. The total bilateral trade
is 133092.1 million U.S. dollars). Vietnam occasionally complains to Taiwan that
Vietnam’s trade deficit with Taiwan is too large, and Taiwan’s standards for
Vietnamese agricultural and fishery products are too strict, but generally speaking,
the economic and trade relations between the two sides are still good.
For Taiwan’s trade negotiators, Vietnam’s decision-making is not easy to predict.
After Vietnam’s anti-Chinese incident in 2014, Taiwan had negotiated with Vietnam
to update the investment protection agreement between the two countries. An
official told me that Vietnam’s attitude was a bit negative in the first few years, but
in 2019 it suddenly changed to a very positive attitude. The progress was completed
in a few months. Taiwan has never known the key to changing its attitude towards
Vietnam from negative to positive.
Tu Lai of the Diplomatic Academy of Vietnam once commented on the development
of Taiwan-Vietnam relations: "How far both Hanoi and Taipei want to go down the
road will depend largely on the resilience of Vietnam's policy and the determination
of the Tsai administration to move away from China and Beijing's political pressure"
Now that the determination of the Tsai administration's desire to join the CPTPP
is clear, the rest depends on the resilience of the Vietnamese side in the face of
Beijing.