Australia backing China to join a regional free trade agreement would be a slight drain on its economy, research says.
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Beijing has asked for Canberra's backing to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and wants members to block a bid by Taiwan.
All 11 member states - which includes Japan, New Zealand, Canada, Singapore and Malaysia - need to agree for another country to join the pact.
Concerns have been raised about China's trading practices and use of economic coercion.
Australia's national growth would be negatively impacted by 0.01 per cent if China were to join the pact, a simulation by the Productivity Commission released on Thursday revealed.
Lowered taxes between China, Canada, Mexico, Chile and Peru would impact the amount of trade Beijing has with the other nations that are part of a separate agreement.
The seven members of both the Trans-Pacific partnership and the Regional Comprehensive Economic Partnership - which included Australia - would be affected.
"Exports from these seven economies fall. Consequently, production in these seven economies also fall," the report said.
But all modeled scenarios about different countries joining various pacts "have relatively minor implications for the Australian economy", it noted.
China would benefit from the Trans-Pacific partnership because of an increase in production, which would have the flow on effect of higher real wages for workers.
If the US joined the pact, it would also negatively impact Australia's economy, with the removal of almost all trade tariffs with member states shrinking it by 0.02 per cent.
But China and Australia are still locked in a trade dispute over products such as beef and lobster despite cooled tensions and other impediments being dropped.
Trade Minister Don Farrell met virtually with Chinese counterpart Wang Wentao on Tuesday, where China's application to join the trans-pacific partnership was raised.
Senator Farrell reiterated Australia's position that any country that wanted to join needed to abide by international trade standards and had a track record of complying with trade commitments and relevant international laws.
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership will eliminate 98 per cent of tariffs within the trade zone when fully implemented.
The pact accounts for economies worth a combined US$12 trillion and more than 500 million people.
Australian Associated Press
