A New Chapter for Beijing after Surviving the Trade War with the US
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After receiving the required number of ratifications this week, the 15-member Regional Comprehensive Economic Partnership (RCEP) will go into effect on January 1.
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According to trade experts, China is taking the lead in growing global trade as the world's largest trade agreement takes effect, leaving behind a more protectionist United States, a report on South China Morning Post (SCMP) says.
After attaining the required number of ratifications this week, the Regional Comprehensive Economic Partnership (RCEP), which includes 15 member nations including China, will come into effect on January 1.
Following eight years of discussions, the RCEP was signed in November of last year, and not only will it expand commerce for nearly 30% of the world's population, but will also further open China to the rest of the globe.
China wants to join the CPTPP
With the RCEP now formally in place, China will be able to drive trade on its own terms, however, some trade experts believe there may still be barriers ahead and that the deal's success needs to be proven, with some even wondering how many nations will fully profit from it.
China also wants to join another trade bloc, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which was formerly known as the Trans-Pacific Partnership (TPP) when it was the centerpiece of the US strategic pivot to Asia until then-President Donald Trump walked away from it early in his presidency.
According to Bryan Mercurio, an international trade law professor at the Chinese University of Hong Kong, the Regional Comprehensive Economic Partnership (RCEP) is a triumph and a new chapter for China after it weathered the US-China trade war and Scrutiny at the World Trade Organization (WTO), with RCEP allowing China to operate outside both realms.
Economic modeling predicts that the RCEP could be the most beneficial for three non-Association of Southeast Asian Nations (ASEAN) nations – China, Japan, and South Korea – because no free trade agreements exist between them., Mercurio added.
RCEP will strengthen China's role in Asian industrial supply chains
Heng Wang, a trade and RCEP expert at the University of New South Wales, also highlighted that the RCEP did not include adequate provisions on Sanitary and Phytosanitary (SPS) measures, trade remedies, electronic commerce, competition, and government procurement.
However, Sheng Liugang, director of the Chinese University of Hong Kong's trade and development research program, concludes that the RCEP will strengthen China's role in Asian industrial supply chains and, ultimately, globalization.
