RECENTLY, China has signed history’s biggest free trade agreement named “RECP” with 10 “ASEAN” countries along with region’s heaviest economic hitters aside from China, including Japan, South Korea, Australia and New Zealand. The Regional Comprehensive Economic Partnership spans 15 countries and 2.2 billion people, or nearly 30% of the world’s population, according to a joint statement released by the nations very recently, when the deal was signed. Their combined GDP totals roughly $26 trillion and they account for nearly 28% of global trade as per 2019 data. Success of this trade deal will absolutely give birth to a more interconnected and vastly inclusive environment in this part of Asian continent. The prime objectives behind this mega deal are the elimination of trade tariffs on each other’s products, acceleration of interdependence, great focus on multilaterism, expedition of cooperation in every matter related to trade, promotion of liberalisation, cultural exchanges and emphasis on free movement within these countries making it a successful Union similar to the “European Union” and “NAFTA”. However, a successful achievement of all aforementioned objectives is conditioned with its members’ commitment, dedication and determination towards this new trade bloc as being its consistent and permanent members. Global analysts are of the opinion that this agreement will take no less than 20 years to reach its goals.
In this agreement, China, Japan and South Korea, being the top economies, are likely to reap more benefits by spreading their products in a tariff free environment than the rest of the member nations can collectively get. Nevertheless, smaller states, being the part of this pact, will also have equal opportunities to sell their maximum products as they will be facing no tariffs and trade obstructions; thus, it can be considered a mutually beneficial trade deal for all member countries. As far as geostrategic benefits are concerned, this agreement reinforces a great power shift from Europe to Asia specifying, relating and associating this 21st Century with South-East Asian region as the centre point for trade and global politics. This pushed and changed gravity will certainly add a number of new tendencies in globally changing paradigms leading to a new world order. Majority of international analysts foresee China surpassing the US by 2050; thus holding the podium as sole superpower after the US. Hence, China’s these agreements alongside its rapidly progressing silk road project “BRI” can be assumed as the preparedness by China to surmount US economically, politically, strategically and socially.
Significance of this deal is further augmented with the fact that inking of this agreement among 15 Asia-Pacific countries is enough unity to dent on an erroneously coined Indo-Pacific narrative by the US. Moreover, Donald Trump, after he became President in 2016, withdrew immediately from “TTP” Trans-Pacific Partnership of 12 South-East Asian countries which severely impacted US position in the Asia-Pacific region, the US has to pay a lot for such blunders. US absence from “TTP” and “RECP” will certainly be having worst consequences for it in terms of its global influence particularly across Asia-Pacific. Tilt of US own allies including Japan, Australia, South Korea and others towards China through this newly signed Trade Agreement will surely weaken US geostrategic stand in South China Sea against China, directly or indirectly declining US hegemony. Contrary to US, China by having a very close nexus with 14 Asia-Pacific Nations through this Trade Deal will assuredly emerge dominant in this region along with its strong position in South China Sea. However, US isolation from South-East Asian world (a lucrative region in terms of trade, market and Pacific water with abundant natural resources) is completely unacceptable for US. Therefore, it can be perceived from Biden’s resolves that he will compulsorily revert to previously withdrawn agreement in order to maintain US presence in Asia-Pacific in general and to compete China in particular.
India is not part of this deal with reservations that if it joins, its domestic manufacturers and producers will get affected by the overflow of Chinese cheap products to Indian markets. Nonetheless, India, being a largest Asian economy, if had entered this pact, position of this deal would have been much stronger. But in this realistic world, personal interests always stay above everything. India understands well the factors behind this deal serving Chinese interests, making it a clear winner; so India avoided being part of this deal. Secondly, since India has various defence and trade pacts with US and being its strategic ally in Indo-Pacific, India will never be partnered in this deal by annoying US. To encapsulate, this trade agreement among 15 Asia-Pacific countries is undoubtedly a great development. Connectivity and trade ties among these nations will certainly be having far reaching benefits to take. It will also curtail South-East Asia’s dependence on western world. Its future growth and progress will definitely increase Asia-Pacific influence across globe, setting new trends for others to follow.
—The writer is Gujranwala based geopolitical researcher and freelance columnist.