The Regional Comprehensive Economic Partnership (RCEP) which was signed by 15 countries in Asia and the Pacific on November 15th including countries other than China like North Korea, Japan, Australia, New Zealand, Philippines (US Asian allies) but does not include U.S. is the world’s newest and biggest regional trade deal.
The initial scope of RCEP is to eliminates some tariffs and it covers the trade of agricultural goods. Another benefit that will bring to the signing countries the particular trade agreement is that adopts specific rules that will set among them which will define how much regional content a product must have for it to enjoy lower tariffs. Rules on product content are almost liberal.
by Thanos S. Chonthrogiannis
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The most important aspect of RCEP is that will ensure the resilience of supply chains by supporting new, more competitive production bases that can withstand the sudden imposition of trade restrictions. This comes as a relief since many in the G20 group of countries-imposed restrictions in the supply chain during the pandemic.
The most beneficial countries form their participation in RCEP will be Japan and South Korea since up-to-date Japan had no existing trade deal with China.
On the other hand, India, which is most concerned that its markets will be flooded with imported Chinese products, has withdrawn from any participation in RCEP, and is a member of the alliance of four states that make up Quad along with Australia, Japan and the US.
Could this four-country alliance Quadrilateral Security Dialogue (QSD-well known as Quad) in the Indian-Pacific Ocean region develop into both a military and a political-trade union.
Its advantages are that:
- All four countries that make up the Quad are jointly concerned about China’s continued rise and ambitions.
- Both the US Japan and Australia share and use common military know-how and culture respectively, while using common weapons systems.
- India recently had a military conflict on its border with China, which in turn has a naval base in Pakistan and provides economic and technological support to Pakistan.
- They will be able to eliminate any duties and tariffs imposed on the products between them but also create a seamless flow of supply of rare earths and minerals equally which are especially useful in their modern industrial and technological development.
- To share and adopt common sense in software and hardware systems that are used in areas such as cyber-security.
- To increase trade between.
- They could expand the circle of participating states including countries such as South Korea, New Zealand, Vietnam, and Philippines.
- They could establish common rules on the security of the region they cover as allied countries.
- They could form the basis for the creation of a new Asian NATO.
But it will all depend on the adaptability and flexibility that the new administration of US President Joe Biden will have to demonstrate.
