Time needed to unlock new Asia-Pacific trade pact's potential to be a game changer

By Josef Gregory Mahoney
0 Comment(s)Print E-mail Beijing Review, November 24, 2020
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Geostrategic significance

The RCEP can also be expected to have positive carry-over effects on a number of regional and national differences. No doubt its prospects helped China and Japan reach a new agreement on taxes, and it might help resolve indirectly other issues as well, including disagreements in the South China Sea and ongoing conflicts between Japan and the Republic of Korea. 

It might also provide a push to continuing negotiations for the EU-China Comprehensive Agreement, which will be especially valuable to China because Biden is expected to have warmer relations with the EU than Trump.

Additionally, the RCEP will strengthen ASEAN and intersect positively with the Belt and Road Initiative and the Asian Infrastructure Investment Bank, which in turn will help these efforts carry their projects far beyond RCEP countries.

Finally, this agreement marks a major defeat for Indian Prime Minister Narendra Modi, with wide-ranging implications for Asia as a whole. Although Modi wanted to join the agreement, India withdrew last year given the intensive backlash New Delhi faced domestically. 

India is in a precarious position currently: It has not been able to contain COVID-19, and above all, while it has seen remarkable economic growth in recent years, many experts agree that its local producers are not developed enough to compete and survive in the RCEP.  

This policy failure might help explain India's aggression on the China-Indian border earlier this year, where Modi diverted domestic criticism by returning to his party's Hindu nationalist roots. But all of it hinders Indian development. Likewise, it also bodes ill for the U.S.-proposed Indo-Pacific Quad, as other members, Australia and Japan, increasingly appear to be looking past the era of U.S. hegemony.

Although India has been invited to join the RCEP when ready, joining or staying out presents a difficult decision with serious national and regional implications. Failing to join may undercut further economic development, particularly as it gives advantages to other countries, but more dangerously, it may encourage additional retrograde, aggressive policymaking in New Delhi, especially if it tries to externalize its internal weaknesses.

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