RCEP, when China spreads her wings

 In Economy

The RCEP, free trade agreement seals the Asian and even more the Chinese “pivot”. As impressive as it is, it bears many ambiguities.

It is the agreement of the century and the one of all records. The RCEP1 encompasses an economic zone that accounts for one-third of the world economy and its population, ahead of the United States and the European Union. Yet this treaty – which has yet to be ratified by the majority of its members – presents so many facets, visible or not, that it is difficult to grasp its full scope.

Launched eight years ago by the ASEAN member countries, and aimed at clarifying pre-existing cross-treaties, the initiative had all the appearances of an attempt to tie up the Chinese giant, like an economic and political Gulliver, in a knot of multiple and ever-widening alliances2. And if Donald Trump’s United States had not pulled out, TPP3 would have somewhat completed the encirclement on China’s Pacific flank. However, victorious over the pandemic and on its way out of the recession, China is in a position to be the major beneficiary of this trade agreement. The Pact seals the triumph of the Middle Kingdom’s strategy and its repositioning over its economic strategy of “dual development”.

This agreement should support the activity in the region, as many members are severely affected by the pandemic.

Many are eager to point out the flaws of the new treaty, which, they say, would only bring modest advances. The lifting of customs duties on many products would be spread over a long period, the terms of intellectual property protection would be too vague, the treaty remains more than incomplete on trade in services, and rules out issues of labor and environmental protection, or subsidies to public-sector enterprises. Assumed cynicism to serve the strongest, or a minimalist pragmatism and a first step to further progress? With this treaty, Japan and South Korea find the opportunity to reach a first formal trade agreement with their large continental neighbor, and the opportunity for better access to markets in the region.

Should we deplore or applaud that India has chosen to stay out of the treaty, or should we be surprised or even feared for Australia and New Zealand – the oldest strategic allies of the United States in the area – who have joined it? Are the ASEAN members comforted and united, or, on the contrary, more aware than ever of their internal tensions, especially when some openly denounce Laos and Cambodia4 as China’s Trojan horses?

In the short term, this agreement should support the activity in the region, as many members are severely affected by the pandemic and its economic consequences. Likewise, the smallest partners rightly see the opportunity to export to a vast and rich economic zone (which, for example, accounts for half of the Philippines’ foreign trade). Moreover, it does not, a priori, exclude the other trading partners of the countries concerned, granting Europeans, among others, the access they already have.

In the end, is this agreement a prelude to the constitution of an economic-strategic “glacis” under Chinese domination, as was the Comecon in the shadow of the Warsaw Pact, which organized the forced division of labor between “brother countries”? Still, it is hard to imagine the historical allies of the United States walking in a such way into the lion’s den.

Despite the undeniable domination of China over the region and the influeance of its President, the RCEP keeps the imprint of the members of ASEAN, its initiators, in search of a model of free trade and alliances like the European one.

Response to Donald Trump’s America, a challenge to Joe Biden’s, the Pact may well encourage the latter to move closer to Amerca’s allies.

1 Regional Comprehensive Economic Partnership, including the 10 ASEAN member countries, China, Japan, South Korea, Australia and New Zealand
2 See “In the Shadow of the Dragon: Southeast Asia in the Chinese Century” by Sebastian Santiago,  Yale University Press, 2020
3 Trans- Pacific Partnership, ratified in 2016
4 In 2012, Cambodia overturned a joint statement by ASEAN members against the Chinese advancing into the China Sea.


Original french version article in allnews.ch Dated November 23 2020  Cartoon ©Barret




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