In mid-November, the countries of the Asia-Pacific region signed an agreement on the Comprehensive Regional Economic Partnership (CREP)
The signing ceremony took place on the sidelines of the Association of Southeast Asian Nations (ASEAN) summit, which is taking place this year in video format.
The agreement provides for the creation of the world’s largest free trade zone. Ten ASEAN countries took part in it: Brunei, Myanmar, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand and Vietnam, as well as China, Australia, Japan, South Korea and New Zealand. They account for almost a third of the world’s population, GDP and world trade.
The signing of the document, according to the parties to the agreement, will stimulate the economic recovery of all countries after the pandemic.
“Further acceleration of the trade liberalization process will further contribute to the economic prosperity of the region”, — the statement said.
Experts emphasize that work on the creation of RCEP has been carried out since 2012. During this time, more than 30 rounds of negotiations took place. In general, the agreement is quite elaborate. In essence, this is the largest free trade platform — the largest population in the world, the most diverse membership, the greatest development potential. According to experts, the new agreement is comparable to the North American Free Trade Area and the EU Customs Union.
RCEP will undoubtedly give a powerful impetus to the development of the APR and spur the global economy. Incidentally, the agreement illustrates that free trade remains the main path for the development of the world economy. Overall, openness and collaboration remain key ingredients for success. And RCEP also shows what a grandiose path Asian countries have traveled over the past few decades.
At the same time, skeptics point out that in terms of trade regulation, lowering tariff barriers and a mechanism for resolving trade disputes, RCEP is not a breakthrough one. And his future, with all the advantages, does not look so cloudless.
“Until recently, the parties to the agreement have managed with varying degrees of success in sorting out politics and economics in different baskets. However, in the context of the global crisis, this will be much more difficult. Especially considering the abundance of problems within the block. There are territorial disputes, and spy scandals, and accusations of interference in internal affairs, and trade wars between the signatory countries, and the fear of opening markets for China”, — Profil magazine writes.
It is curious that China and its partners in the bloc are essentially proposing a joint plan to overcome the crisis. Some experts even call the new agreement a kind of Asian analogue of the Marshall Plan, the implementation of which will strengthen Beijing’s position.
As you know, China has put forward the concept of the Asia-Pacific Community of a common destiny. One of the principles of this community is “openness and inclusiveness”. The other three are innovative growth, connectivity and mutually beneficial collaboration. As the Chinese leader Xi Jinping puts it, «having met the mountain, we will climb it together, having met with the gorge, we will overcome it together».
China is called the main beneficiary of this agreement. Although it was the ASEAN countries that initiated and developed the project. And China has been active since the United States pulled out of the Trans-Pacific Partnership in 2017. It was the collapse of the TPP, which became a consequence of Donald Trump’s policies, that largely determined the creation of RCEP, analysts say.
Alexander Lomanov, head of the Center for Asia-Pacific Studies of the IMEMO RAS, in an interview with Kommersant, emphasizes that as a global industrial site, China has earned trillions. But it can no longer compete with its Asian neighbors with cheap labor and low production costs. Other Asian countries are ready to take over the production baton, the level of development of which lags behind China for a couple of decades. And the Chinese strive to retain paying overseas customers by providing quality at an affordable price.
In any case, the Chinese economy is moving from quantity to quality, the professor said. There is no other way, because cheap goods can be produced only by cheap workers who are unable to provide high effective demand within the country. China intends to compete in the field of innovations and modern technologies, using the advantages in the field of higher education, the presence of a large number of qualified personnel. And the Americans want to slow down this process.
Many experts believe that with the help of RCEP, Beijing will nevertheless undermine Washington’s economic positions. It should be emphasized that some RCEP members are American allies. And the fact that they are blocking with Beijing shows that the United States is losing its influence. Of course, the Americans will resist. So the economic redistribution of the world is still ahead.