China's regional trade pact bid derails as Australia stalls and Japan tensions deepen

What happened to Australia is now happening to Japan — almost step for step.

The same cycle that defined Beijing's pressure campaign against Canberra is now unfolding across the East China Sea: a diplomatic thaw, a burst of optimism, and then a sudden reversal triggered by a political disagreement.

This time, though, the consequences stretch far beyond the bilateral relationship.

China's escalating confrontation with Japan is colliding directly with its attempt to join one of the world's most demanding trade agreements — the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

And because Australia is chairing the CPTPP process this year, the diplomatic fallout is landing squarely on Canberra's desk.

Hot and cold in predictable intervals

China and Japan have a long record of brief diplomatic thaws followed by sudden deterioration.

The pattern is so regular that both governments now treat it as political weather: the skies clear for a while, then a storm arrives without warning.

The latest reset happened only weeks ago. Chinese and Japanese leaders met on the sidelines of APEC and pledged to build a "constructive and stable" relationship.

Talks resumed on stalled economic projects. Japanese exporters who had been caught in Beijing's 2023 seafood ban were finally allowed to apply for permits again.

Then the temperature dropped overnight.

After Japanese Prime Minister Sanae Takaichi said a Chinese attack on Taiwan could trigger a collective self-defence response, Beijing reacted sharply.

China's commerce ministry accused her remarks of "fundamentally undermining" the political foundation of the bilateral relationship. Officials warned of "resolute measures" and suggested a renewed ban on Japanese seafood.

Within days, flights were cancelled across 12 major routes. Japanese companies worried about their export permits and Beijing began signalling that the relationship was once again entering a hostile phase.

For Japanese industries — especially seafood, tourism, and manufacturing — the message was clear: China's playbook has not changed.

The problem for Beijing

China's behaviour toward Japan lands at the worst possible moment for its CPTPP ambitions. Beijing applied to join the agreement in 2021, hoping to position itself as a champion of regional economic integration at a time when Washington had stepped back from trade leadership.

But the agreement is not just a trade pact. It is a rule-heavy framework built on transparent decision-making and non-discrimination dialogues between members.

China's approach to Japanese seafood — approving exports one month and threatening to shut them down the next — undermines all of those principles.

It echoes the pressure tactics used against Australia from 2020 onwards, when Beijing imposed a series of trade restrictions on barley, wine, coal, and seafood.

The timing makes it impossible to dismiss these incidents as isolated. CPTPP members were meeting in Melbourne to assess new membership bids.

On the eve of those discussions, one member state is being economically punished by the country seeking entry.

That creates a structural problem for China: CPTPP enlargement requires unanimity.

And Japan holds a veto.

'Yes' almost impossible for now

Even without the latest clash, Japan was already cautious about China's application.

The agreement contains high standards on subsidies and state-owned enterprises — areas where Tokyo believes Beijing falls short.

But political pressure now makes approval almost unthinkable.

Beijing is directly linking trade retaliation to Takaichi's Taiwan comments. For a Japanese government facing fear of escalation in the East China Sea — and a public already deeply sceptical of China's intentions — approving China's CPTPP bid would be politically untenable.

It would also raise a practical question: how can a country that uses trade to punish political speech be trusted to uphold the CPTPP's rules?

As long as the seafood issue remains unresolved, and flights remain suspended, any movement toward approving China's application would be domestically indefensible for Tokyo.

The pressure is now on Canberra

Australia assumed the CPTPP chair on January 1. On paper, the role is technical. In practice, it gives Canberra considerable influence over the pace and structure of accession discussions.

This places Australia in a rare position of leverage. It can emphasise technical assessments over political decisions, and prioritise other applicants such as Uruguay, Indonesia or the Philippines, while slowing the timetable for China's bid without formally rejecting it.

Given Japan's situation, a cautious approach is not only justified — it is expected.

Canberra will not want to inflame tensions with Beijing, especially after trade ties stabilised through 2023–24. But it also cannot be seen to rush China's application at a moment when Japan, a key regional partner, is under open economic pressure.

The safest path is the slow one: emphasising process, standards and transparency.

Politically, that path benefits the Albanese government, with Vietnam set to take the hot seat next year.

But the real quesiton lingering for every member is this: if economic coercion remains an active threat, which country would be willing to say no to China and expose itself to it?

A delay strengthens Australia's hand

A slower process gives Australia several advantage — it reassures Australian voters.

Many Australians still remember the tariffs and bans Beijing imposed. A deliberate, standards-first approach shows Canberra is asserting its independence and not allowing economic normalisation to dictate its broader strategic decisions.

Other CPTPP members — including Canada, Singapore and Mexico — share concerns about China's ability to meet the agreement's standards, particularly on state subsidies and coercive behaviour.

A careful approach avoids fracturing the group.

It also maintains stability with China by avoiding a direct rejection.

Canberra does not need to say "no". It simply can say they will proceed according to the rules, and those rules require thorough assessment. When the chair follows procedure, no one can claim political bias.

The Melbourne meeting produced progress on several fronts: the accession of Uruguay, new dialogues with ASEAN and the EU, and early signals that Indonesia, the Philippines and the UAE may follow.

These are easier applicants politically, and their entry strengthens the CPTPP's role as a regional rule-setting institution.

Significantly, both the CPTPP–ASEAN and CPTPP–EU joint statements expressed concerns about market-distorting practices, economic coercion, and the need for predictable, transparent trade rules.

The language is diplomatic, but the reference points are clear.

China entered the CPTPP debate hoping to present itself as a stabilising economic actor and a counterbalance to US trade protectionism. But its own actions toward Japan — abrupt, punitive and openly linked to political disagreement — have made its case harder to sustain.

China does not need unanimous support today. But it will need Japan eventually.

And at the moment, Japan is the country most directly bearing the cost of Beijing's coercive instincts.

As long as this cycle continues, China's pathway into the CPTPP will remain blocked by the country it is punishing — and slowed by the country now chairing the process.