The world’s most considerable trade agreement, the RCEP (Regional Comprehensive Economic Partnership), is a reality now. After 8-year-old consultations with 15 countries including China, Japan, South Korea, Philippines, Vietnam, Malaysia, Indonesia, Australia, and New Zealand consolidating more than 25% of global trade – 30% global GDP, became an economic chain from 15th November 2020. The association with 2.2 billion people and 27 trillion economies is larger than the European Union and Canada-USA-Mexico agreement. Agreements with significant economies like China, Australia, and economies like Myanmar and Laos are meant to open by lowering tariffs, reinforcing the supply chain, cutting red tape, developing e-commerce strategies, and rising investments. There are multiple goals for these alliances, one of which is certain – producing 100 trillion economies united. Some experts believe this is one step towards a powerful Asian Union that will stay further.
ASEAN (Association of South – East Asian Nations) operated as a broker in this agreement. Countries have clear economic goals and several trade agreements with all these participants. With this important deal, the associated countries’ expectations grew, so they can associate with all influential nations in the region. Although India is not covered in this region, the presence of China in the deal is considered as the most interesting element in this pact. Western media and some mainstream media in Australia have already started to criticize this pact as benefiting the business in China. All other members spend money on China’s business where some already pointed out intellectual policies in the pact which benefit China. The problems in the region were further elevated this year along with negotiations; all countries have high levels of border disputes, some reached harmful levels South China Sea border clash, Taiwan problem, China-Japan concern, the Korean conflict, and Australia – China trade war is open-ended too. It’s a fact that anti-China thought rose during the COVID-19 crisis even though Chinese media made a great impact in this region.
While the United States is not geographically in the region, it is assigned as a key player in this region. Japan, the Republic of Korea, and Australia are considered as closest allies of the US. The United States is trying to stick with its allies and prevent China’s entry and they anticipate a second economy – China can replace them in the region and slowly make all countries bound to them the predecessor TPP (Trans-Pacific Partnership). An agreement by ASEAN making the US a chief partner instead of China, but Donald Trump has withdrawn from it saying the arrangement is not fair but it will lead to the entrance of China. Global experts believe this is a wake-up call for the United States’ newly elected president, Joe Biden, not to recognize joining the TPP or RCEP. The US can play everywhere beforehand, the Australians have an anti-China stance and opposition to this deal and India’s withdrawal, interestingly they said that Australia will become a dumping ground of Chinese products. But there is a significant Indo-China conflict and Australia thinks this pact is important as China needs market theory.
The chance of producing more from this agreement is limited as long as the United States is the protection ally in the region instead of China. A new open-China instead of a strong anti-China view in the region and dogma of funds that will unite them could stop the United States from obstructing. Chinese premier Li Kequiang was quoted at the virtual signing ceremony as saying that it was a victory for multilateralism and free trade. Politicians kept the door open for India, the fifth-biggest economy and a market of 1.1 billion people; though some experts believe this will end as an economic deal because there are no environmental or labor contracts and committed countries to open services like in TPP. It’s a fact that this arrangement will help the recovery from the COVID-19 economic crisis, but who will be the actual beneficiary of this pact will remain as a question mark.