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Check-in 2020.11.12 15:23
The world’s largest FTA … 2.2 billion people, a third of global GDP
China launches RCEP, but “depends on Biden’s business strategy”
The signing of the ‘Regional Comprehensive Economic Partnership (RCEP)’, the world’s largest free trade agreement (FTA), led by 15 countries, including Korea and Japan, is imminent. After the United States withdrew from the Pacific Rim Economic Partnership Agreement (TPP), discussions accelerated in China and were even signed.
China is looking forward to the deal and is trying to launch it through state media, but success or failure is being analyzed to depend on the business strategy of the Joe Biden administration of the Democratic Party. If Biden rejoins the TPP and embraces allies, China’s plan to expand its influence in Asia Pacific through RCEP is likely to be in vain.
According to Bloomberg and the Financial Times (FT) on the 12th (local time), the leaders of the 15 countries participating in the RCEP decided to hold a video conference on the 15th and sign the agreement. The participating countries are Korea, China, Japan, Australia, New Zealand and 10 ASEAN countries. Its gross domestic product (GDP) is one third of the world, with a population of 2.2 billion.
RCEP aims to facilitate exchanges between regions beyond the economic realm, such as the European Union (EU) and North America. Since many member states already have bilateral trade agreements, it is unlikely that tariffs will be significantly reduced. Although the rate of reduction of tariffs on agricultural and fishery products among member countries (the share of non-tariff items) is higher than before, there are many countries that are burdened by cheap imports from China, so there is not much change .
It is analyzed that the three countries of Korea, China and Japan have laid the foundations for the signing of an FTA between the two countries through this RCEP. Currently, only Korea-China has signed an FTA, and Korea-Japan and China-Japan have not signed an FTA. The trilateral FTA between Korea, China and Japan was also discussed at one point, but disagreement over the content of the agreement was great and geopolitical conflicts overlapped and broke down.
China, which led the deal, launched a campaign through state media Global Times saying: “RCEP will be the engine of economic recovery after the coronavirus.” Seon Ming-hui, secretary general of the APEC East Asian Cooperation Center of the Chinese Academy of Social Sciences, said: “Amid the expansion of the crown and uncertainties due to unilateralism and protectionism, solidarity among Asian countries Oriental is more important than ever. “
However, there are voices of concern among some member countries such as Japan and Australia, which are holding back China’s excessive economic expansion. In the process of discussing the agreement, China insisted on reducing tariffs on agricultural and fishery products and expanding the products they trade, but Japan and Australia were in a tug of war, saying that provisions should be added in areas such as electronic commerce. and public procurement.
India initially decided to participate and then left last November. India, which had been suffering a sharp increase in the trade deficit with China, raised negative public opinion that cheap Chinese-made imports could be dumped through RCEP. He said he wouldn’t.
Experts predicted that if Biden rejoined the TPP after taking office next year, ties between RCEP members would weaken and China’s influence would also wane.
William Reinhe, advisor to the Institute for Strategic and International Affairs (CSIS), a former trade official in the Clinton administration, said: “It depends on the response of the United States whether the RCEP changes the regional dynamic in favor of China.” “If he had a reliable plan to restore influence and influence, Chu would lean on the United States.”
