The signing of a 15 member trade pact, Regional Comprehensive Economic Partnership (RCEP), is a watershed moment not only for the proponents of a post-American ‘Asian Century’, but also a major even in the history of US-China economic competition, a power-struggle that certainly has major implications for global political and economic system. RCEP includes all member of the Association of Southeast Asian Nations (ASEAN) and China, Japan, South Korea, Australia, and New Zealand. The presence of these major economic powers makes the RCEP the largest free trade agreement the world has ever had in history. The 15 nations account for roughly a third of the world’s population, and their combined GDP is a whopping US$26.2 trillion, bigger than both the US-Mexico-Canada Agreement and the European Union.
While an ASEAN initiative launched in November 2020 in Cambodia, the pact received a lot of boost and became a lot more important for the member countries when the out-going US president Donald Trump, soon after becoming president, scrapped the US-led Trans Pacific Partnership (TPP), a mega trade project that was to allow the US to lead the world’s largest geography of trade. The TPP became a casualty of Trump’s policy of ‘America First’, a thinly disguised form of economic nationalism.
While there are many economic-power-houses in the deal, the RCEP will naturally be leveraged by China geo-politically and go-economically not just in terms of allowing it to expand its reach to Southeast Asia, but also in terms of enabling it to counter US politics of counter-influence in Asia.
At the same time, the RCEP will give China some breathing room from Trump’s tariff-raising trade war and generally rising protectionism. Already, the ASEAN bloc has surpassed European Union to become China’s largest trading partner in the first eight months of 2020.
These developments clearly dispute the recent ‘findings’ of RAND Corporation, a Pentagon think-tank, claiming that “Southeast Asian countries rank economic development over security concerns and are generally more worried about Chinese economic influence than Chinese military threats.”
While the pact shows a significant and a hard-negotiated leap forward, the RAND report said that “Regional countries have more shared interests with the United States, but Beijing has more tools it is willing to use against Southeast Asia,