Political significance

Both economically and politically, the agreement arrives with almost impeccable timing. Global economic struggles related to the novel coronavirus disease (COVID-19) encouraged it, as did the U.S.-instigated trade war against China and Washington's aggressive position in trade with most countries, even allies, along with its efforts to undermine the WTO specifically and multilateralism generally—all of which encouraged political and economic instability long before the pandemic. 

The immediate context is the RCEP's success in the wake of U.S. President Donald Trump's possible re-election defeat, as well as the humanitarian disaster facing the U.S. given the Trump administration's stunning failure to contain COVID-19.

Despite Joe Biden's projected presidential election win, the likelihood is high that he will face a hostile senate and a polarized population, nearly half of which view his victory as illegitimate. This means the U.S. must be viewed as an unreliable partner, even if Biden reverses Trump's withdrawal from the Trans-Pacific Partnership, softens the aggressive policies that undermined U.S. economic and strategic relations around the world, oversees effective virus responses including rebuilding the U.S. economically, and recommits the U.S. to multilateralism. 

In these contexts, the RCEP marks a major defeat for Trumpism and a major victory for the sort of new world order promoted by China, one that moves beyond a U.S.-led world order and gives more credence to the idea that we are now living in the "Asian century."

These developments, in tandem with China's growing economy, have prompted concerns that the RCEP further signifies the rise of a Sinocentric world order. To be sure, as the biggest player in the agreement, and with its own unique political system and values, China will need to stay sensitive to these fears and work deliberately to avoid related problems. However, there are three reasons why these are not so serious, which helps explain why the agreement's signatories—which are so tremendously diverse, political, economically, and culturally—have joined all the same.

The first, above all, is that the RCEP represents China's deepening commitment to multilateralism in lieu of using its size to simply bully smaller economies, which stands in stark contrast with the United States' efforts.

Second, because the agreement is not as comprehensive as others, it avoids the sort of national impositions that have undermined other agreements, i.e., the EU common market, and it fits with China's foreign policy principle of self-restraint when it comes to the domestic affairs of other countries and vice versa.

Third, China's new dual circulation strategy for economic development at home remains committed to global trade but with a focus on rebalancing away from export-led growth, improving strategic independence and increasing domestic consumption. In other words, this new strategy not only helps mitigate some worries that China will be aggressive through exports, it also encourages others to get on board as potential increases in Chinese consumption create a boon for imports.

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