|America Odd Man Out||
16 November 2020
Cogito Ergo Non Serviam
Last night, 15 Asia-Pacific nations signed a free trade deal by video link. The Regional Comprehensive Economic Partnership [RCEP] is the result of 8 years of negotiations covering 2.2 billion people and 30% of the global GDP. That is less than it might have been, but India withdrew from the talks over protecting its agriculture and domestic industry. The real missing piece, however, is the United States of America. Without the US, this becomes a major win for Chinese power.
The members of the RCEP are the members of ASEAN (Brunei Myanmar, Cambodia, Timor-Leste, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam) along with Australia, New Zealand, Japan, South Korea and the People's Republic of China. The deal makes a great deal of sense for all concerned. Access to vast markets and greater regional integration will make everyone richer, and one hopes, less likely to go to war. That is the example of the European Union.
That China would dominate the group absent an American counterweight is almost inevitable. India might have played such a role, but it would have more than likely been akin to France in the EU relative to Germany, for which read China. The fact of the matter is that 1.3 billion Chinese will eventually have the largest economy in the world. China's relative weakness vis-a-vis the West was an historical aberrration, and as China catches up technologically, its greater numbers will show. Crudely put, more people means more talent means more opportunities means more money.
The US had its chance to create a trading bloc that would have locked China out, or at least, brought China in after the ground rules had been set. However, the US rejected the Trans-Pacific Partnership. While there were arguments in favor of the move, the grand strategic effect was to abandon the field to China. China, in turn, took advantage of the fact.
"While the United States is currently focused on domestic concerns, including the need to fight the pandemic and rebuild its economy and infrastructure, I'm not sure the rest of the world is going to wait until America gets its house in order," said Jennifer Hillman, a senior fellow for trade and international political economy at the Council on Foreign Relations. "I think there are going to have to be some responsive actions to what China is doing."
For the members, there is not going to be the same level of integration that the US, Mexico and Canada have under the NAFTA deal or its Trumpian successor USMCA (NAFTA 1.1). For instance, there is no harmonization of labor standards nor on environmental regulations. The effect will be to export dirty industries to the poorest member states and for their labor to be used to keep prices down rather than paying more expensive wagers elsewhere. Since services are exempt from opening up, most of the white collar workers will not suffer much, and their votes will continue to be cast as before -- at least in those countries where votes are cast at all.
Nevertheless, the deal is a step forward for free trade, regional integration and for the foreign policy of the People's Republic of China.
© Copyright 2020 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Ubuntu Linux.