by WILLIAM PESEK
RCEP may lack clarity but the China-centric trade pact ties three of Asia’s four biggest economies closer together than ever
On his presidential watch, Donald Trump did manage to make one thing great: economic cooperation within North Asia.
So chaotic and pernicious was the outgoing US president’s pivot away from Asia that China, Japan and South Korea are dropping the hatchet and joining hands. The unlikely union was formalized on November 15 with the signing of the 15-nation Regional Comprehensive Economic Partnership, or RCEP, free trade agreement.
It marks an epochal setback for Washington nearly four years after Trump left the 12-nation Trans-Pacific Partnership, leaving Tokyo to take up the leadership role and promote the TPP. At the time, the TPP was the biggest trade pact ever, grouping 40% of the world’s gross domestic product (GDP).
America’s departure from the TPP opened a void into which the Beijing-led RCEP, which comprises about 30% of global output, just filled.
The US economy President-elect Joe Biden will inherit on January 20 is not only reeling amid surging Covid-19 cases. It is entering 2021 on the back foot as Beijing positions itself at the center of the global economy for the decade and perhaps decades to come.
And for a region looking to a better post-Covid-19 tomorrow, the RCEP could hardly come along at a better time.
The agreement constitutes two important firsts, namely the first bilateral move to lower barriers between Japan and South Korea and the first time three of Asia’s four biggest economies genuinely compartmentalized economic cohesion away from still-fraught political machinations.
“If RCEP spurs mutually beneficial growth, its members, including China, will gain influence across the world,” says Peter Petri at the Brookings Institution. “US policies in Asia need to adjust to the changing realities of East Asia, recognizing the increased role of China, maturing ASEAN integration and America’s diminished relative economic influence.”
The Japan-South Korea part of the deal is perhaps most impressive of all. For years, the US sought to bring its two squabbling allies closer together, and failed. Tokyo-Seoul relations are now at a nadir in a tense squabble over wartime forced labor compensation.
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