RCEP AGREEMENT: Is it a "master stroke" of China?

 In the wake of US President Donald Trump's trade war and the formation of an anti-China military alliance, Xinjiang has signed a macroeconomic and trade bloc agreement with ASEAN countries and key neighbours Japan and Australia.

 The last Democrat president of the United States, Barack Obama, started the work of forming such a trade alliance. And in the same way that Donald Trump has removed the United States from several other international initiatives since he became president, the Asia-Pacific trade initiative has removed Washington from the TPP. 

Beijing has since stepped up its efforts to implement alternative trade bloc. Initially, India was involved in organizing the alliance, but Delhi was not present at the video conference signed in Hanoi. At the same time, any other SAARC country has not joined the bloc as a partner.

The largest trade alliance in the world

China and 14 other countries on Sunday formally agreed to set up the world's largest trade bloc. 

In addition to ASEAN, the 10 Southeast Asian nations include China, Japan, South Korea, Australia and New Zealand. Officials say the door to the deal has been left open for India. That being said, RCEP is a system that will benefit 2.2 billion people across the region.

ASEAN initiated the Regional Integrated Economic Partnership (RCEP) in 2002. China, Japan, South Korea, India, Australia and New Zealand were invited to participate. India, a major ally of the United States in the Asia-Pacific region, decided to withdraw at the last minute of the talks. 

Commenting on the agreement, Chinese Premier Li Keqiang said that the RCEP was a victory for multilateralism and free trade. Leaders of other countries participating in the meeting also made similar comments. However, some Western media outlets have described China as one of the biggest beneficiaries of the RCEP, to expand China's influence in Asia.

"They misinterpret China's interaction with the world in the 21st century, ignoring the prosperity and constructiveness of the RCEP for the whole region," the Chinese official mouthpiece Global Times said. 

These people have problems with the value system and the ability to judge. Their prejudices against China are so deep that they get confused whenever China is involved in any issue."

" If China wins the so-called victory this time around, it will be a victory for other members of the RCEP as well. Because these countries have made efforts for their benefit during the last eight years of negotiations. All countries can only win this agreement. 

"This is the basic way of development of China. China has been looking for a way to win and develop for all from the beginning, and Beijing has gathered a lot of common interests around the world like a snowball. China has always been able to cooperate with the United States and its pro-China allies in effective and mutually beneficial ways. "

Now that Trump's opponent Joe Biden has been declared president-elect, many are watching the situation to see how the region develops U.S. policy on trade and other issues. At one point, the Obama administration launched the Trans-Pacific Partnership (TPP) in response to the ASEAN Free Trade Agreement. 

It is also mentioned that the Biden administration may try to bring it back. The TPP agreement was a proposed trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and the United States. 

The agreement was signed on February 4, 2016. President Donald Trump withdrew the United States from the TPP in January 2016. Later the agreement was not implemented due to lack of necessary approval. 

Other countries are negotiating a new trade agreement for the Trans-Pacific Partnership, which includes most of the provisions of the TPP and came into force on 30 December 2016.

Beijing's cold-headed move

The Asia-Pacific Free Trade Agreement was signed at a time when the four-year rule of Donald Trump in the United States was coming to an end. Trump's rebellious voice against the election results is now fading. That means Joe Biden's Democrat rule is set to begin next January. 

The idea was that if Trump had stayed in power, he would have stepped up his trade war against China. The trade war has cost China about 600 billion in crackdowns on Chinese citizens in the name of protecting its market, withdrawing the investment, imposing sanctions on Chinese companies, and dismantling Chinese intelligence networks by imposing higher tariffs on Chinese goods.

At the same time, the top American companies investing in China have also suffered huge losses. It is unknown at this time what he will do after leaving the post. At the same time, China's cheap goods have not been able to enter the US market, forcing its citizens to spend more money in the Corona recession.

The extent to which this has been visible in American society and economy is illustrated by the fact that Donald Trump's vote in the country's election was a disaster. 

Traditionally, those who have contributed huge sums to the Republican presidential candidate's election fund have now filled the Biden camp with donations. Even in the aftermath of the Corona pandemic, Biden's election fund has seen a record amount of money. 

As a result, the Democrats have not been able to hold elections as well as they did this time. And Biden's victory in the Swing State, like Michigan, Pennsylvania and Georgia, has made it clear that the response to China's cheap goods has created an uproar among low-income Americans.

Trump's trade war has had an impact not only on American companies and consumers but also on US allies in Asia. On the one hand, the untimely death of the American Free Trade Agreement has deprived these countries of access to US markets. And in the face of the Trump administration's animosity in Washington, China has moved forward with support for the trade bloc.

In this context, the statement of the Global Times is noteworthy. The magazine said, ‘Maps of global areas of interest are no longer drawn based on influence. 

The prosperity and expansion of sovereignty and technological advancement make it possible for countries to explore new sources of interest in every region of the world. 

With the general reduction of security threats, economic interests become more prominent and all countries prioritize economic and social development over their national interests. 

At the very least, it is increasingly difficult to justify abandoning the economy in the interests of security as a pragmatic policy. 

Some US and Western elites view China as an "expansionist empire" and see China's expanding cooperation with any country or region as part of it. They have misunderstood China, time as well as the world.

China's secret power

One thing that often goes unnoticed is that all countries, regardless of their power, have a visible economy as well as an invisible economy. The shape of the invisible economy in the free market and liberal countries is not as big as in countries with regulated or semi-regulated economies.

 China is a last-ditch country with three to four trillion dollars in investable cash. Combining the size of the two visible and invisible economies compared to the size of China's visible economy that we get from official sources, China will now be the world's largest economy. 

Also, the way the world is now moving towards hybrid technology, the use of rare-earth or rare metal is increasing in both the military and civilian industries. And China is the supplier of 80 per cent of the world's rare metals.

The trade war against China could not be waged anywhere in the country or abroad, just as Donald Trump was able to use his "America Fast" slogan to mobilize white supremacists against immigrant Americans. 

Low-income Americans have not been able to make use of the country because they have been denied access to cheap goods, and many companies have lost their investments and markets because of the trade war with China. 

On the other hand, the US allies in Asia are suffering from insecurity both militarily and economically under the 'America first' policy. The decision to cancel the TPP was an important message for them.

Will Biden count the value of Trump's recklessness?

In the aftermath of the post-World War II treaty, Japan has relied on American defence guarantees without building a major defence system. As soon as Trump came to power, he said that allies would have to pay the price for Americans in the shadow of security.

 In this situation, Japan has entered into a kind of investment and security agreement with China. Australia, under pressure from Trump, did not want to put the economy in danger of being boycotted by China, no matter how much the Quad alliance was formed.

 And Vietnam, which has the most disputes with China over the South China Sea, has also found itself in danger of an economic trade war against China. Countries like Malaysia, Indonesia, Philippines and Thailand could not go beyond reality. 

In front of them, the value of Chinese cash investment seems to be much higher to deal with the Corona-North economic animosity.

Barack Obama himself warned of the consequences when announcing his departure from the TPP as revolutionary or reckless. The Trump administration dismissed the remarks by American think tanks as echoes of Democrat thinking. Before the end of Tamp's departure, the scene that Obama and Biden feared came to the fore.

Everyone knows Joe Biden as a man of a cool head and thought. It is difficult to say how much he can do to restore the confidence of Asian allies. 

And initiatives like creating a trade zone do not work overnight. Biden may come up with something alternative. Or join TPP and bring back its previous form. But time is like the running water of a river. 

Once the current of the river merges with the salty river, it cannot be reversed. Still, it remains to be seen what Joseph Biden will do after taking office. However, Trump's a trade and investment war against China is likely to end at any level. It will not be possible after the new 15 nations trade agreement.

Modi's hopes are shattered!

The South Asian countries are not with the Great Trade Agreement that has been signed with the special support of China. Probably because of India's withdrawal from the initiative, Beijing is not in a hurry to get other South Asian countries to take part in it at the moment. 

However, Modi's hopes that anti-China investment and trade wars will be shattered by the hopes of world capitalists to come to India and invest in India seem to be dashed. Japan and Australia, India's two quad partners, are the two main pillars of the new trade bloc. 

Why would they withdraw their investment from China and go for a big investment in India? For this reason, probably Japan will not withdraw investment from China, meanwhile, they will make new investments in India. However, it is very unrealistic to declare that, Japan can leave China and invest in India for a profit of 2 cents instead of 10 cents.

Last words

According to many experts, RCEPs may pose some hurdles for the US in upcoming days especially their multinational companies outside the US and Asia-Pacific region to do business there. 

In particular, the Trump administration's withdrawal from the TPP talks and the implementation of the RCEP agreement will make it harder for US companies to exert influence in the region. Many of these analysts believe that while the RCEP is an Asia-Pacific agreement, its impact will not be limited to the region.

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