RCEP free trade zone poses challenge to next US president

16-Nov-2020 Intellasia | Taiwan News | 6:02 AM Print This Post

One of the challenges awaiting President-elect Joe Biden after his inauguration in January is whether or not the United States should join the Regional Comprehensive Economic Partnership (RCEP) the world’s largest free trade area, which will be formed Sunday (November 15).

Members will include the 10 Asean states, Japan, South Korea, Australia, New Zealand, and China. The US and India opted not to join, though the trade zone will cover 2.2 billion people, or 30 percent of the world’s population, and nearly 30 percent of its gross domestic product.

This image made from a teleconference provided by the Vietnam News Agency (VNA) shows the leaders and trade ministers of 15 Regional Comprehensive Economic Partnership (RCEP) countries pose for a virtual group photo in Hanoi, Vietnam on Sunday, Nov. 15, 2020. China and 14 other countries have agreed to set up the world’s largest trading bloc, encompassing nearly a third of all economic activity, in a deal many in Asia are hoping will help hasten a recovery from the shocks of the pandemic. (VNA via AP)

This image made from a teleconference provided by the Vietnam News Agency (VNA) shows the leaders and trade ministers of 15 Regional Comprehensive Economic Partnership (RCEP) countries pose for a virtual group photo in Hanoi, Vietnam on Sunday, Nov. 15, 2020. China and 14 other countries have agreed to set up the world’s largest trading bloc, encompassing nearly a third of all economic activity, in a deal many in Asia are hoping will help hasten a recovery from the shocks of the pandemic. (VNA via AP)

Following President Donald Trump’s decision in 2017 to withdraw from the Trans-Pacific Partnership (TPP), the formation of RCEP shows how the US has lost power to influence regional economies to China’s benefit, academics and experts said.

By staying outside trade alliances, the US has in effect left a vacuum to be filled by China, William Reinsch of the centre for Strategic and International Studies told the Bloomberg news service. With Washington absent, Beijing can expand its influence unhindered and tie more economies in the Asia Pacific closer to its own aims.

As a result, US corporations will encounter more problems to sell their products and services in one of the most consumer-oriented and rapidly developing markets in the world, critics of the Trump Administration said. Syracuse University economist Mary Lovely said membership is a necessary move to provide access for US companies.The TPP, which has since transformed itself into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), might welcome the US as a member in the future. However, sentiment against free trade could still be too high to allow the Biden Administration to make such a move within the near future.

https://www.taiwannews.com.tw/en/news/4052953

 

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