Asia-Pacific allies have signed a huge trade deal with China while the U.S.

Asia-Pacific allies have signed a huge trade deal with China while the U.S.

Vietnamese Prime Minister Nguyen Xuan Fuch (left) and Trade Minister Trin Tuan Anh applauded Japanese Prime Minister Yoshihid Suga and Trade Minister Hiroshi Qaziyama next to the screen for signing the RCEP agreement in Hanoi, Vietnam. China and 14 other countries have agreed to establish a trading bloc.

Plow Dinh / AP


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Plow Dinh / AP

Vietnamese Prime Minister Nguyen Xuan Fuch (left) and Trade Minister Trin Tuan Anh applauded Japanese Prime Minister Yoshihid Suga and Trade Minister Hiroshi Qaziyama next to the screen for signing the RCEP agreement in Hanoi, Vietnam. China and 14 other countries have agreed to establish a trading bloc.

Plow Dinh / AP

President-elect Joe Biden said Monday that the United States should align itself with other democracies so that they can write the rules governing global trade – not China.

They were responding to a reporter’s question on whether the 15 countries of the Asia-Pacific region signed on Sunday whether the United States should engage in any major trade deals in the regional broad economic partnership.

RCEP unites China, Japan and South Korea for the first time in trade deals, including 10 Southeast Asian countries, plus Australia and New Zealand.

As China deepens trade and investment partnerships in the region and around the world – it is one of the world’s largest trading blocs, with the largest economy and India, the largest democracy in the US.

The combined RCEP members make up about a third of the world’s population of 4.5 billion people, and an equal share of the global economy and trade, According to Association SF Southeast Asian Nations or Asian a The Peterson Institute estimates international economics The new deal could potentially grow the global economy by 18 6,186 billion annually.

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After eight years of difficult negotiations, the RCEP arrived as the coronavirus epidemic battered the economies of member countries. In Indonesia and the Philippines, for example, the combined number of coronavirus infections has reached nearly 900,000 cases, and millions have lost their jobs due to lockdowns to eradicate the virus.

Inside Joint statementRCEP member leaders said the signing of the agreement “demonstrates our strong commitment to supporting economic reform, with job creation and the epidemic slowing down with” open, inclusive, rule-based trade and investments. “

The agreement will facilitate investment and reduce already low tariffs between member countries from time to time. According to Deborah Elms, founder and executive director of the Singapore-based Asian Trade Center, it will initially bring little benefit. “Not everything will be cut. Not everything will go to zero. And the timeline on some sensitive products is too long,” he says.

For example, Japan will maintain tariffs on rice, wheat, dairy products, sugar and beef and pork to protect its farmers. Bloomberg report.

Elms says, “The deal may be more ambitious, but this is a very diverse group of 15,” which combines rich nations like Japan and Australia with poor people like Laos and Cambodia.

Some media have labeled the RCEP an effort driven by China, but analysts say it is inaccurate. Michael Green, senior vice president for Asia at the Center for Strategic and International Studies, says that although China was the largest economy in the agreement, it was no longer dominated by China. He named Japan and ASEAN members, including Singapore, as drivers.

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India had been a party to the talks but withdrew last year.

President-elect Joe Biden has not specifically said that the U.S. should join him in the RCEP. Conference on Monday in Delaware.

But he noted that the U.S. It accounts for 25% of the world economy, and, “we need to connect with other democracies, 25% or more, so that we can set the rules of the road instead of China and others. Direct the results because they are the only game in the city.” . “

He also said that after he takes office, labor and environmentalists will “be at the table of any trade deals we make.”

RCEP does not take into account labor standards or environmental protection. Nor does it prevent state-owned industries from gaining a competitive edge with government subsidies.

Chad Bowen, a trade economist at the Peterson Institute for International Economics, says, “It doesn’t really provide any kind of branching or barrier that could change China’s economic model at all.”

Analysts say one more agreement than the RSCP is known as the original Trans-Pacific Partnership. Trans-Pacific Deal – which Withdrew and named “Comprehensive and Progressive” on the front of its name and 11 remaining countries signed – set a high standard for rules, imposed some restrictions on state-owned enterprises, reduced tariffs, promoted innovation and developed a digital economy. , Says Green of CSIS.

President Barack Obama championed the Trans-Pacific Trade Agreement as a hedge against China, writing the rules of global trade in the 21st century. But within days of taking office, President Trump Pulled out of the deal, and imposed tariffs on trading partners and started a trade war with China.

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a Brookings Institution The blog analysis says the Trans-Pacific Deal and the new RCEP “together with the US-China trade war will offset the global damage, though not for China and the United States.”

Green says the U.S. Will “regret” being on the side of two major multilateral agreements. He says this will have two benefits for China: “One is that it will create a narrative within the region that China is the new leader with the most influence on trade and regulation, and the other is that it will reduce barriers to trade with China. “Nothing is being done to reduce barriers to trade with the United States.”

Wendy Cutler, a former U.S. trade representative, hinted at another capture. Writing in a recent commentary“The RCEP is another reminder that our Asian trading partners have gained the confidence to work together without the United States.”

All of these pose challenges for the incoming Biden administration.

China, meanwhile, hailed the RCEP as a victory. “The signing of the RCEP is not only a great achievement in East Asian regional cooperation, but even more important, the triumph of multilateralism and free trade,” Premier Li Keqiang said. According to Chinese state media.

However, CSIS ‘Green says that “critical game” historians will probably go back to “not reducing tariffs since the 20th century, but the 21st century definition of data, reciprocity, digital trade, where the US is the decisive player.”

“So, we’re not completely out of the game.”

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