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This is at least what the experts have defended, as the Financial Times puts it. Especially after Donald Trump left the negotiations for the side deal, the TPP.
“A common criticism of RCEP is China’s dominant presence, a fear that was reinforced by the withdrawal from India. The agreement gives China a important voice in setting standards for regional trade“Summarizes the newspaper. With the US (and the EU) out of these two major trade deals, and China leading the way in Asia, US influence is expected to wane in the region.
“It is a blow to China, by far the largest market in the region with more than 1.3 billion people, allowing Beijing to position itself as a ‘champion of globalization and multilateral cooperation’ and give it greater influence. by deciding the rules that govern regional trade, “the Associated Press writes, in turn, citing economist Gareth Leather of the consultancy Capital Economics.
Additionally, lower tariffs mean lower operating costs in Asia, which may encourage multinational companies trying to “avoid Trump’s tariffs on products made in China” to stay active in Asia rather than transfer it to South America. . North, says Mary Lovely of the Peterson Institute for International Economics in Washington.
But Bloomberg adds that “whether or not the RCEP will change regional dynamics in China’s favor will depend on the US response.” And for that, the new administration will be decisive.
The United States is out of the TPP, a decision made in 2017 by Donald Trump, after coming to power. The deal was being negotiated with the United States and included Asian countries associated with Beijing, but excluded China. Among other priorities, it initially contemplated changes in labor rights and intellectual property, as well as limits on subsidies paid by states to public companies. It was seen as an Obama response to China’s increased influence in the region.
The US withdrawal did not mean the death of the pact, which changed its name to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Signed in March 2018, it is already in force in seven of the 11 signatories.
Joe Biden has made no commitment to return to a trade deal with Asian countries. According to Bloomberg, it is not certain how the Biden administration, which has not yet been officially named the winner, will confront the trade deals and whether it will reverse Trump’s decision and join the CPTPP.
The Associated Press writes, in turn, that analysts are “skeptical” regarding a return to the trans-Pacific agreement or the removal of the US trade sanctions imposed on China by the Trump administration, “given widespread frustration with Beijing’s human rights record and espionage charges.”
It is an indirect advantage. According to the Financial Times, Japan and South Korea are among the countries that will benefit the most from the agreement, but both Europe and the United States can also benefit from lower tariffs in Asia, by having access to cheaper Asian products.
They seem to agree with the thesis that it will not only improve relations, but also lay the foundation for a free trade zone.
In the case of Indonesia, the country says the agreement will allow it to recover from the pandemic and increase GDP by 0.05% between 2021 and 2032. Citing a private study, Commerce Minister Agus Suparmanto stressed that the RCEP can increase exports by up to 11% and investment by 22% in the five years after ratification.
Japan also believes that the agreement will bring benefits. “By eliminating tariffs, I think there will be a big impact on Japan’s export improvement and increase the efficiency of supply chains in the region, ”said Commerce Minister Hiroshi Kajiyama.
“The conclusion of the negotiations is a strong message affirming the role of ASEAN in supporting the multilateral trading system,” Vietnamese Prime Minister Nguyen Xuan Phuc said before the virtual signing ceremony.
Singapore, on the other hand, argues that the deal will make signatory exports more competitive. “In recent years, there have been several ups and downs and it certainly has not been an easy ride. It reached a point where prospects for entering into the deal were shaken by geopolitical concerns. We all had to compromise to move the negotiations forward.“, Highlighted the Minister of Commerce and Industry of Singapore, Chan Chun Sing.
Chinese Premier Li Keqiang pointed out that the fact that the RCEP was signed after eight years of negotiations, and in a pandemic, “puts a ray of light and hope in the clouds”. “It clearly shows that multilateralism is the right path and represents the right direction for the world economy and the progress of humanity,” he said, quoted by AFP.
And the Australian government believes that farmers and entrepreneurs will benefit from “better export opportunities”.
No. The agreement has yet to be ratified internally by the countries, within two years.
The rules state that at least six ASEAN countries and three outside the association must ratify it before it can take effect.
