BASC News, 2021
Against the backdrop of deglobalization and trade protectionism, 15 countries signed the Regional Comprehensive Economic Partnership (RCEP) in November 2020. The signing parties include China, Japan, South Korea, all the countries from the Association of Southeast Asian Nations (ASEAN), Australia, and New Zealand. This mega free trade agreement (FTA) is the world’s largest, covering a market of 30% of the world’s population, with approximately 30% of global gross domestic product. At the time of this writing, RCEP is awaiting final ratification. Each RCEP member will go through its own domestic legislative process, and at least nine of its 15 members, including at least six ASEAN members and at least three from outside ASEAN, must approve it.
While RCEP demonstrates the success of ASEAN’s middle-power diplomacy and will promote regional trade and economic development over time, China will arguably achieve the largest utility gains from the trade pact. RCEP serves its national interests and will make the region’s largest economy even more powerful economically and politically. The implications could well bring overt competition between China and the United States.