Following the signing of the Regional Comprehensive Economic Partnership (RCEP) on November 15, media reporting around the world has entered into a fanfare mode. In particular, media from Western countries and China are reporting such mega free trade deal as headlines within the narrow lens of US-China competition and conveniently overlooked ASEAN’s international agency (capability to act internationally) in the formation of such trade bloc. For instance, global media outlets such as the CNN and Reuters, had been highlighting the RCEP as a China-backed free trade bloc that excluded the US while further alluded to the view that Beijing is affirming itself as the pivotal economic partner for Southeast Asia, Japan, South Korea, Australia and New Zealand.
Likewise, another major media, New York Times, is suggesting that the regional free trade deal to which China is participating as a major actor, stands to be a counterweight to Washington’s economic influence in the East Asian region. Meanwhile, China’s official mouthpiece, Global Times, also joined in the foray. Supplanted with the views of Chinese economists emphasizing the active role Beijing played in concluding the regional free trade deal, RCEP is been branded as the success of China’s path to trade liberalization and multilateralism as opposed to the American protectionism and unilateralism. Such discourse framing, of course, is not surprising considering the economic, high-tech and even ideological competition Beijing is mired into vis-à-vis the US today.
By all means, the framing of RCEP within the context of US-China competition (as showcased by these reports)has led to the prevalence of the popular “myth” that RCEP is a China-backed free trade bloc and as such, Beijing is affirming its economic influence in the East Asian region through the trade deal. This boils down to the questions: Is this the reality on the ground? Are there differences between such “myth” and realities? In tackling these two questions, there is a need to separate such “myth” into two parts of arguments.
First and foremost, RCEP is an ASEAN-led free trade agreement (FTA) that comes with the Southeast Asian bloc’s centrality. By that, it means not only ASEAN is leading the charge by bringing both major economies such as China and Japan, into one platform for FTA, it is also harmonizing the existing bilateral FTAs it signed with each external partners into a standardized regional version known as RCEP. Whether it is equal or not less better than bilateral agreements that ASEAN signed with five external partners of China, Japan, South Korea, Australia and New Zealand, RCEP is basically agreed based on the pretext that such FTA starts with lower standards for trade and services’ liberalizations but progresses over time (maybe 10 years or more) into a new version of FTA with higher standards of liberalizations. It is such progressive liberalization that forms the core component in defining ASEAN’s centrality for its free trade quests around the world.
As far as the claim on RCEP being a China-backed trade deal, it should be treated as such since Beijing is indeed actively supporting ASEAN for such deal. That said, any over-emphasis of it without greater recognition to ASEAN, gives the misleading perception that the regional trade deal is Beijing-led and therefore, the remaining 14 countries are band-wagoning China as passive or subservient followers without any international agency. As Brookings Institution coined it very well, if ASEAN is not in-charge of the agreement back in 2012, the RCEP would never go beyond its starting line as both China and Japan were not politically accepted as the chief negotiators back then. Therefore, emphasizing RCEP as a “China-backed” trade deal is doing disservice to ASEAN which spent 10 years of efforts in deliberating, negotiating and concluding the trade deal as the central party for its six external partners (including India which pulled out from the trade pact last year).
The other argument pertains to the claim that China is affirming its economic influence in the region through the RCEP. While this is true to a certain extent, it is again far from the overall reality in East Asia. As alluded earlier, the RCEP is a FTA with lower standards of liberalizations and given such limitation, sensitive trade and service industries were basically protected from any free trade commitments. For instance, tariffs for trading products such as pork and tiles, remained high in both Japan and Vietnam, making it hard for other RCEP partner countries (including China) to export their goods to these countries. As for trade in services, the schedules of reservations and non-conforming measures for services and investment among the states, are even more overwhelming. Not only China excluded its automobile, rare earths, and communication equipment industries from RCEP’s liberalization commitments, other fourteen countries also furnished with their own lengthy schedules of reservations and non-conforming measures with the exception of Singapore which continued to open its economy within the regional trade pact.
Considering such reality within the RCEP, it is not hard to understand the reason both Peterson Institute of International Economics (PIIE) and University of Queensland (UQ)-Indonesian Ministry of Finance (MOF Indonesia),are projecting marginal gains for China from the mega trade deal ⸺ the former predicting an additional 0.4% to the country’s real income by 2030 while the latter’s 0.08% by the same year. As opposed to that, Japan stands to gain a lot from RCEP, especially its industrial goods that make way into the Chinese market. With 86% of the Japanese industrial goods to China eliminated within the RCEP, Japan’s auto parts suppliers are the big winners of the mega trade deal so much so that domestic Chinese players would face strong competition from its neighbour once the trade liberalization measures kick off in the coming years.
With all these realities in the offing, the claim that China is affirming its influence in East Asia through RCEP should be taken with a pinch of salt. With the conclusion of lower-standard liberalizations of RCEP, it is arguably hard to conclude that the trade deal actually affirms China’s economic influence in East Asia when it is staring at marginal gains from such a deal. Furthermore, with China being the largest trading partner for most of the RCEP countries (if not all) even before the regional trade deal is signed, any claim that Beijing will gain even more economic influence through the trade pact is harder to substantiate given that sensitive industries remained protected by other participating countries.
Given all the realities that challenge the “myths” propagated by media from the West and China, RCEP is best described as a mixed success for Beijing ⸺ as in backing the regional trade deal but not leading it, while at the same time, deriving marginal gains instead of huge gains in the next 10 years. The promise of RCEP, however, is best appreciated by focusing on ASEAN as the “new kid on the block” that has been the center of economic courtship from major powers in the West as to the East’s. Notwithstanding the limitations of RCEP in the next 10 years, the fact that ASEAN managed to assemble all major economies under its platform while simultaneously, ensuring that mega trade deal serves the economic interests of these powers, served as a boost toits capability as a middle power in the East Asian region. With this new dynamic emerging in the global trade order, it is time for the media to move on from the conventional fixation of “China, China and China” in their media reporting of RCEP and treat ASEAN as an actor with its own international agency.