It’s good to see ‘multilateralism and free trade’ returning to the scene after an absence of four years, with the signing of the Regional Comprehensive Economic Partnership (RCEP) last Sunday by the 10 countries of the Association of Southeast Asian Nations (ASEAN) plus Australia, China, Japan, New Zealand and South Korea. Whilst this agreement was, by all accounts, limited in scope, the symbolism of the region’s senior leaders standing in front of their national flags and applauding eachother over a zoom link must surely be seen as a very positive step in the right direction at the end of this “annus horribilis”.
I’ve read and heard many media stories about this event but the one I found most interesting was from the New York Times which focused on the two countries who were conspicuously absent from the trade pact – the USA and India. In the case of the USA, the reasons for this are well known and “to some trade experts, this new agreement shows that the rest of the world will not wait around for the United States. The European Union has also pursued trade negotiations at an aggressive pace. As other countries sign new deals, American exporters may gradually lose ground”. It remains to be seen whether President-elect Biden will seek a return to the table of multilateralism, a chair that has been left vacant in the last four years.
India’s absence is more surprising but reflects their desire “for a more ambitious pact that would have done far more to tie together the region’s economies, including trade in services as well as trade in goods”. You would imagine that they will be back to the table very soon.
Here in Australia, the hope is that the RCEP will lead to a thaw in the Australia-China trade tensions and a return to a more harmonious relationship between the senior leaders on both sides. I wish this were true but I fear it’s unlikely. Australia has a lot of hard work ahead to repair the damage caused by their politicians this year. For more on this, see Desperate Measures.