Brief: The World’s New Largest Trade Pact

The signing of the RCEP will amplify China’s economic influence.

Background: The framework for regional trade in the Asia-Pacific has been in a state of flux for the past four years. This is partly a result of the Trump administration’s sharp pivot away from multilateral trade structures – culminating in its withdrawal from the 12-nation Trans-Pacific Partnership in 2017 and subsequent launch of the U.S.-China trade war – but it’s also the result of China’s own increased efforts to leverage the economic dependence of many of its neighbors for strategic gain. This environment compelled remaining TPP member states to rescue the ambitious “gold standard” trade pact, inking a slightly modified version in 2018. But it had also clouded the future of the Regional Comprehensive Economic Partnership, which was originally intended to include the 10 members of the Association of Southeast Asian Nations, plus China, Japan, South Korea, Australia and New Zealand. Participating states were keen to nail down a regionwide pact to offset the impact of rising protectionism in the West. Given the extreme range of differences in the economies involved, though, along with deep strategic and economic concerns held by many members about China’s inclusion, negotiations seemed likely to either end in failure or produce, at best, a pact […]

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