The creation of the Regional Comprehensive Economic Partnership will leave the U.S. sitting on the outside of Asia’s two major free trade blocs.This mega -pact includes China but not the USA.
The Regional Comprehensive Economic Partnership (RCEP) is set to be signed after eight years of “blood, sweat and tears,” conjuring into existence a free trade zone that will encompass a third of the global economy.
The RCEP mega-pact, which includes China but not the United States, was finalized in a virtual ministerial meeting on November 11 and will be signed on the final day of the 37th ASEAN Summit on November 15. The signatories to the trade deal – which unites the 10 nations of ASEAN plus Japan, China, South Korea, Australia, and New Zealand – have also left the door open for India, which withdrew from the RCEP negotiations earlier this year, due to concerns about the impact on local producers.
“All RCEP participating countries have concluded negotiations and will sign the RCEP agreement this Sunday,” Mohamed Azmin Ali, Malaysia’s international trade and industry minister, said in a statement following the ministerial meeting. “After eight years of negotiating with blood, sweat and tears, we have finally come to the moment where we will seal the RCEP Agreement.”
While some observers have questioned RCEP’s likely cohesiveness, its creation will leave the U.S. languishing outside the two major existing Asian trade agreements, even as it seeks to counter and neutralize China’s ambitions in Asia.
In January 2017, three days into his presidency, President Donald Trump withdrew the U.S. from the Trans-Pacific Partnership (TPP), a 12-nation trade deal that was painstakingly shepherded across the line by the Obama administration. Kurt Campbell, who served as assistant secretary of state for East Asian and Pacific affairs under Obama, described the TPP as the “true sine qua non” of Obama’s “pivot to Asia” policy.
The 11 other TPP signatories have pushed forward with the pact, now known as the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP). While they would welcome the incoming Biden administration rejoining the deal, this is unlikely given the prevailing skepticism about free trade deals on all sides of U.S. political dial.
Although the U.S. retains a significant edge in military power, and remains a crucial economic partner to many Asian nations, the present administration has neglected the economic dimensions of its competition with China. As I’ve noted before, its tendency of picking small-bore trade disputes with regional partners has only undermined its broader goal of countering China’s influence in the region. Ankit Panda, a former editor at The Diplomat, wrote on Twitter that the imminent signing of RCEP was “a reminder that big things are happening – and will continue to happen – in Asia, with or without the United States.
While the strategic impact is unlikely to be felt immediately, the long-term ramifications could be profound. In the mid-twentieth century, the U.S. setting of international standards – on everything from trade rules and industrial standards to the angle of screw threads and shape of traffic signs – was a crucial and often underestimated pillar of American global power. But according to Evan Feigenbaum of the Carnegie Endowment for International Peace, the U.S. now sits outside the two agreements “that will set trade and investment standards in Asia for a generation.”
The RCEP deal is set to be signed on the final day of the 37th ASEAN Summit, which will run from November 12-15. The summit – and its surrounding galaxy of meetings, ASEAN+1 conclaves, and talk-shops – is being conducted via video link due to the ongoing pandemic. Also high on the crowded summit agenda will be recovery from the COVID-19 pandemic and the ongoing humanitarian crisis in Myanmar’s Rakhine State.
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Comment by John Menadue. This mega- pact includes China but does not include the US. Most of our media have failed to mention this very important fact.
We need to be part of institution building in our region and include both the US and China. That is what our diplomacy should be about .
Blind Freddy would see the importance of China joining but the US failing to join the pact is highly significant . How reliable a partner is the US? High reliable is our media in failing to tell the full story.
Sebastian Strangio is Southeast Asia Editor at The Diplomat.
Comments
5 responses to “Asia-Pacific Nations Set to Sign Massive Regional Trade Deal (The Diplomat Nov 12, 2020)”
Quote ‘How reliable a partner is the US? High reliable is our media in failing to tell the full story.’
Look no further than the Kevin Rudd sponsored attempt to achieve a Royal Commission into the current media domination John for an answer. New Zealand is clearly swimming with the ride as it recently concluded yet another bilateral upgrade to its trading relationship with Chine in addition to inclusion in RCEP. We have to be thankful that Oz has signed up, whether reluctantly or otherwise. We can but hope that we don’t play the same role in RCEP that the UK played in the EU. To my mind it is equally important that Japan, Korea and Indonesia are all in the deal, given the company, Oz will need to sustain a creative diplomatic presence to have impact on decision making, I suspect NZ will find itself the Ireland equivalent in RCEP. Economically being inside should make OZ the go to for Anglo-Phone countries to gain access to RCEP markets providing we have the human resources available for successful Inward investment. Education and trading anybody, if we stuff up then we will become peripheral and suffer the consequences.
Setting standards follows from the fundamental and applied research that enables the creation of new applications – systems and devices. After 3G standards were largely set elsewhere, China had input to 4G, has been very significant in 5G development and is now doing practical as well as theoretical and design work on 6G. A Chinese satellite to test proposed 6G technologies was launched last week. Scimago 2019 data of peer reviewed journal papers shows Chinese output as much more than twice that of the US for “electrical and electronic engineering” and “computer networks and communications”.
The RCEP is not complete without the membership of India and the US. Although the door is left open for India to join in later, nothing has been said about the US. Perhaps, the absence of US would be an advantage for this pact since they would have ironed out their diffrence and settled on issues before the US joins in and could potentially throw a spanner in the works. However, Australia may have difficult to leading the pact without US support. A very probable situation would be that Australia will be the follower not the leader as dictated by the Asian countries but not China.
The RCEP includes 30% of the world’s people, 30% of the world’s GDP, and 60% of the world’s GDP growth. It is already in negotiations with the EEU, the Russia-led pact, to merge and my adopted country, Thailand (an ASEAN and RCEP member) will be admitted to the EEU next year.
Expect to see the entire Eurasian continent united by trade and security agreements, and bound with rail and fiber optic lines, customs and legal agreements, and even a continent-spanning electricity sharing network (GEIDCO) by 2030.
Australia media has been largely a ventriloquist doll for the US Trumpians against China. But our skipper Scottuss Ratuss has abandoned the sinking SS Trump and is swimming.