By Lucy Craymer and Joe Cash
AUCKLAND/BEIJING (Reuters) -&nbsp;China&nbsp;should be able to meet standards set out in a major&nbsp;trans-Pacific&nbsp;trade&nbsp;pact,&nbsp;trade&nbsp;experts say, forcing members to make a&nbsp;politically uncomfortable decision on whether to let Beijing join a deal created to counter its growing influence.
Britain joined the Comprehensive Progressive&nbsp;Trans-Pacific&nbsp;Partnership (CPTPP) at a meeting in Auckland this month just over two years after its application, clearing the way for members to consider others from&nbsp;China, Taiwan, Ukraine, Costa Rica, Uruguay and Ecuador.
China's application, by far the&nbsp;biggest&nbsp;economy, is next in line if they are dealt with in the order they were received, although that is not a given.
When asked whether there was a time frame for when the next applications would be considered, CPTPP host nation New Zealand's&nbsp;Trade&nbsp;Minister Damien O'Connor said: "No."
The free&nbsp;trade&nbsp;agreement has its roots in the U.S.-backed&nbsp;Trans-Pacific&nbsp;Partnership, developed in part to counter&nbsp;China's growing economic dominance. The U.S. pulled out under President Donald Trump and it was reborn as the CPTPP with members including close U.S. allies Japan, Australia and Canada.
China&nbsp;wants to be part of the CPTTP because the ruling Communist Party places a lot of stock in its economic performance, which has suffered recently due to various&nbsp;trade&nbsp;restrictions, and because it sees the bloc's high accession requirements as fresh impetus for economic reform at home, analysts say.
The absence of the world's largest economy incentivises&nbsp;China&nbsp;to meet the high&nbsp;entry&nbsp;requirements as "the hidden motive" for Beijing is to "defeat the scheme by the U.S. to use the CPTPP as a way to contain&nbsp;China," said Henry Gao, a law professor at Singapore Management University.
A Chinese Ministry of Foreign Affairs spokesperson said its application was in line with efforts to deepen reform and expand&nbsp;trade&nbsp;cooperation with other countries.
TECHNICAL&nbsp;HURDLES
The CPTPP requires countries to eliminate or significantly reduce tariffs, make strong commitments to opening services and investment markets and has rules around competition, intellectual property (IP) rights and protections for foreign companies.
"The conventional wisdom is... that 'Oh well, it's too high level and&nbsp;China&nbsp;with its state-owned enterprises (SOE) couldn't get into that agreement. So therefore it's not going to happen.' I think that is completely wrong," Tim Groser, a former New Zealand&nbsp;trade&nbsp;minister and chief&nbsp;trade&nbsp;negotiator said.
He said there was a desire by at least some in&nbsp;China&nbsp;to use the agreement to drive reform such as in SOEs.
However,&nbsp;China&nbsp;offers SOEs subsidies and could struggle to meet the requirement to be an open and market-driven economy. And while IP rights are improving, there continue to be high-profile cases of IP theft from Western companies.
The CPTPP also has a focus on digital&nbsp;trade&nbsp;and prohibits forcing foreign companies to store local data in country - for example, in&nbsp;China. Beijing's data sovereignty laws have only become tighter in recent years.
"If a country's economies rules are really quite far apart from what CPTPP says, then inevitably there's quite a big question about whether they could undertake really, really massive reforms," said Graham Zebedee, Britain's CPTPP chief&nbsp;trade&nbsp;negotiator, without commenting specifically about&nbsp;China's application.
Trade&nbsp;experts noted the&nbsp;pact&nbsp;does have exemptions, such as protections for national security, and&nbsp;China&nbsp;showed it could liberalise when it joined the World&nbsp;Trade&nbsp;Organization.
"The CPTPP is important for us. Not because it'll be easy but exactly because it will be difficult and tough,"&nbsp;China's Ambassador to New Zealand Wang Xiaolong said in a recent speech. He said potential accession was an "impetus to the domestic reforms" that would be undertaken.
SHADOW OF POLITICS
Ultimately the decision will be&nbsp;political&nbsp;rather than technical, because a deal to allow a new entrant must be agreed upon by all members. Australia, for example, has said it would not endorse&nbsp;China's application while Beijing continues to block the import of Australian goods including wine and barley.
Furthermore, the U.S., Australia, Britain, Canada, Japan, and New Zealand last month signed a statement condemning economic coercion that was widely seen as referring to&nbsp;China's behaviour at a time when many countries are looking to lessen supply chains' reliance on Beijing.
Hopes also remain that the U.S. might reconsider its early CPTPP withdrawal, creating a dilemma for signatories given their veto power and the risk&nbsp;China, if admitted, could block a future U.S.&nbsp;entry.
"I think Japan, Australia, Canada and Mexico, they have to all act on their own. The U.S. walked away, so they shouldn't really try to restrict others to talk with other partners," said Wang Huiyao, president of the Center for&nbsp;China&nbsp;and Globalization think tank and a former member of the Chinese People's&nbsp;Political&nbsp;Consultative Conference&nbsp;political&nbsp;advisory body.
When asked if the U.S. would reconsider joining the CPTPP, U.S. Secretary of State Antony Blinken told reporters in Wellington last week it is focused for now on the Indo-Pacific&nbsp;Economic Framework, which aims to improve supply chains and business conduct but is not a free&nbsp;trade&nbsp;agreement.
China&nbsp;has backed a rival Asia-Pacific&nbsp;trade&nbsp;pact&nbsp;called the Regional Comprehensive Economic Partnership (RCEP), which excludes the U.S. and involves cutting tariffs rather than opening up economies and dictating labour and environmental standards as the CPTPP does.
For CPTPP members,&nbsp;China's application is not the only&nbsp;political&nbsp;dilemma. Taiwan is also seeking to join the&nbsp;pact, in a move opposed by&nbsp;China&nbsp;that member&nbsp;trade&nbsp;negotiators remain unsure about.
"It's a consensus. So ultimately it depends on what everyone decides at the table," said Natalie Black, Britain's&nbsp;trade&nbsp;commissioner for Asia&nbsp;Pacific.
&nbsp;
(Reporting by Lucy Craymer in Auckland and Joe Cash in Beijing; Editing by Jamie Freed)

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Analysis-Biggest hurdles to China entry into trans-Pacific trade pact are political