Australia’s strategic dilemma in CPTPP expansion: Taiwan or China?

Background: How This Became a Thorny Issue

Expansion prospects for the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a pivotal Asia-Pacific trade pact, have long drawn interest. With Britain’s accession finalized, attention turns to assessing new applicants. Yet Costa Rica now be poised to join the 12-member group, potentially leapfrogging earlier aspirants—notably China and Taiwan—in an awkward geopolitical twist.

China and Taiwan submitted their membership bids mere days apart in September 2021—a proximity laden with geopolitical tension. Beijing’s unyielding “One China” principle, which views the self-governing island as sovereign territory, casts a long shadow over any consideration of Taiwan’s accession.

Table I: A table comparing key aspirant economies and their application status as of recent reports

Australia, for its part, has adopted a conspicuously fluctuating position. In 2022, Prime Minister Anthony Albanese initially hinted Canberra might block Taiwan’s application, invoking the CPTPP’s status as an accord between “recognized” nation-states. But later, his administration subsequently reversed course, acknowledging the eligibility of economies and customs territories. Such vacillation underscores the competing pressures shaping Australian policy: domestic political calculus, economic imperatives, and the delicate navigation of regional diplomacy.

A Tightrope: Australia’s Factsheets from the brothers

The economic lure of China’s potential CPTPP accession for Australia is substantial. Sino-Australian trade dwarfs that with Taiwan tenfold, highlighting the potential commercial prize, and membership could deepen these ties, opening vast markets for Australian resources, agriculture, and services. Yet challenges abound fiercer competition for Australian firms and worries about China’s adherence to trade rules. Compounding this are anxieties over Chinese economic coercion and geopolitical friction, making Australian support for Beijing’s application politically fraught.

Table II: Australia with China’s trade volume being approximately 10 times larger than Taiwan’s

Taiwan’s bid presents a contrasting calculus. Though the direct economic gains for Australia would be smaller, the geopolitical stakes are considerable. Admitting Taiwan, a vibrant democracy and semiconductor powerhouse, would signal Australia’s support for a like-minded partner and align with its strategy of promoting a resilient, diversified Indo-Pacific order. Yet backing Taipei risks Beijing’s fury. China fiercely opposes any step implying recognition of Taiwan’s sovereignty. For Australia, constrained by its “One China” policy, even tacit support could provoke economic retaliation or diplomatic rupture.

The Chessboard: A Multi-Player Equilibrium Game

Ultimately, CPTPP accession hinges on unanimous consent from all members. Yet deliberations over admitting China and Taiwan reveal a knotty mix of economic logic and political calculation, blending national interests with geostrategic concerns.

Japan is a positive voice openly backing Taiwan’s application, pointing to the island’s compatibility with the CPTPP’s democratic and rule-of-law principles, and the UK had expressed support for Taiwan’s application to join the CPTPP, too. Canada, though not explicitly supportive, is presumed sympathetic owing to shared democratic values with Taiwan. Yet Ottawa maintains a studied neutrality, wary of both its strained relations with China and the risk of further antagonizing Beijing.

New Zealand and Malaysia, conversely, seem more amenable to China’s entry, motivated perhaps by their extensive economic ties with Beijing. Singapore strikes a pragmatic, albeit non-committal, posture; its leader has stipulated that China must satisfy CPTPP criteria and address lingering disputes with member states.

Table III: Other Major Stakeholders’ Attitudes towards China and Taiwan‘s accession

In the near term, geopolitical frictions—especially the thorny Taiwan question—make the simultaneous accession of both China and Taiwan highly improbable. Existing CPTPP members continue weighing the economic allure against the strategic hazards, engaged in what promises to be a lengthy and complex geopolitical endgame.

An Approach: Balancing Proactiveness and Prudence

Australia’s CPTPP chairmanship in 2025 grants it significant leverage over the bloc’s expansion. Yet Canberra must tread carefully, balancing substantial economic interests against the complex geopolitics of potential accession by both China and Taiwan.

Table IV: A table presents a detailed comparison of Australia’s favor for China and Taiwan’s entry into CPTPP

As a liberal market economy and major commodity exporter, Australia stands to benefit in principle from further trade liberalization. Yet overtly backing Taiwan’s accession—offering seemingly marginal economic gains—risks embroiling Canberra in geopolitical knots and further fraying ties with China. Especially, recent Chinese naval maneuvers near Australia underscore the potential for heightened bilateral friction. Canada’s prudence in prioritizing trade with Beijing while eschewing needless provocation may offer Canberra a lesson in restraint.

With Trump-era II unilateralism, tariff wars, and a weakened WTO undermining global commerce, the CPTPP emerges as a vital proponent of free trade. Successfully expanding it could significantly bolster Australia’s strategic standing. Yet rejecting China’s bid solely on geopolitical grounds risks proving counterproductive, not least because China is Australia’s largest trading partner. Conversely, even an Australian inclination to support Beijing would require consensus among members, such as UK and Japan, holding different strategic calculations.

Barring substantive changes in context, Canberra would be well-advised to adopt a cautiously constructive posture: endorsing in principle the accession of economies meeting CPTPP’s high standards while refraining from premature declarations on specific applicants. Maintaining strategic ambiguity—emphasizing rigorous compliance with accession criteria and consensus-based decision-making—may represent Australia’s optimal approach for balancing economic pragmatism with regional stability. As 2025 chair, Australia could leverage its convening power to facilitate substantive dialogues on the bloc’s future trajectory and membership benchmarks, thereby cultivating more favorable conditions for eventual decisions.