The Regional Comprehensive Economic Partnership (RCEP) trade agreement gives Beijing huge advantages in its economic competition with America.
The new RCEP trade agreement, spanning 15 countries has nearly one-third of the world’s population.
With the coming of the new year, RCEP trade agreement came into force.
Signed at the end of 2020, and ratified by at least 10 of its parties through 2021, the deal constitutes the largest free trade agreement in history, spanning 30% of the world’s GDP and bringing China, Japan, South Korea, Australia, New Zealand, and the Association of Southeast Asian Nations (ASEAN) into one bloc, where members enjoy 90% of goods tariff free.
It is not surprising that China has been quick to herald the deal as a massive win for itself, coming at a time when the United States is advocating ‘decoupling’ from Beijing and adopting a protectionist stance.
Despite demanding it single-handedly dictates the future of the Asia-Pacific region, Washington finds itself sitting outside of the group. Even some of its closest allies, including Canberra and Tokyo, have just deepened their economic integration with China even further.
With China now also hoping to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), America’s policy is undoubtedly crumbling under the weight of its own contradictions. Either way, there is nothing they can do to change the geographic reality that China sits at the heart of the region’s economy.
America’s present economic and foreign policy is primarily geared towards just one thing: China. At home, American politics has forged a consensus that Beijing is responsible for undermining the competitiveness of US industries and jobs through its growing dominance of global trade, which led to the ‘America First’ policies under Trump.
These have included the weaponization of tariffs and the blacklisting of Chinese companies, as well as blanket opposition to free trade, save on America’s terms. Abroad, the United States concurrently fears the rise of Beijing as a rival power that will erode its global dominance, especially in Asia, which has led to its ‘Indo-Pacific strategy’.