Asia Pacific

In Asia, a New Kid on the Trade Bloc

Today, Asia, under China’s leadership, has a clear head start and can set the tone for what a post-coronavirus world will look like.
Peter Isackson, Asia’s Regional Comprehensive Economic Partnership, RCEP treaty, post-COVID recovery Asia, China economic power, US China relations, Joe Biden Asia economic policy, Trans-Pacific Partnership news, RCEP signed, international trade news

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November 16, 2020 08:27 EDT

History undergoes serious change thanks in particular to slow events that fly below the media’s radar. Focusing on dramatic, immediate events, the media tends to neglect the major shifts that unfold over time. Paradoxically, slowly developing events that often go unreported tell the true story of history. Most often, the exciting, explosive events that dominate the news merely serve to accelerate longer-term trends.

There is a simple scientific reason for this. Systems react immediately to dramatic events that occur quickly and unexpectedly. They typically mobilize their defenses to improvise a rapid reply. Rather than signaling change, such actions serve to protect and reinforce the status quo.

The 9/11 attacks, clearly the most dramatic event of the past two decades, provoked a massive response from the US government. The effort to oppose the emergence of the new shape of terrorism appeared to mark a decisive shift in contemporary political history. The response consisted of a global military alliance intent on defending the prevailing “rule of law” and the elaboration of a powerful security state.

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The effort piloted by George W. Bush and Tony Blair ended up simply reinforcing the focus of Western nuclear powers on the idea that sophisticated military technology provided the key for governing the world. It confirmed and consolidated the long-term trend of building the entire Western economy and culture around the American military-industrial complex.

Distracted by a relatively meaningless transfer of power in the US following Joe Biden’s election and other colorful events such as the comic melodrama of relations within British Prime Minister Boris Johnson’s chaotic Brexit team, today’s media have paid scant attention to one event of monumental importance that took place on Sunday. The event itself was unremarkable, but it is a powerful indicator of historical change. The signing on Sunday of the act that brought Asia’s Regional Comprehensive Economic Partnership (RCEP) into existence marked a crucial moment in a slowly evolving shift that began nearly a decade ago and will have a profound impact on history in the coming years.

In its article on the event, Al Jazeera quotes one American expert, Jeffrey Wilson, who sees RCEP as “a much-needed platform for the Indo-Pacific’s post-COVID recovery.”

Today’s Daily Devil’s Dictionary definition:

Post-COVID recovery:

The idea which some people consider to be phantasy that the global economy may some day return to normal once COVID-19 is eradicated.

Contextual Note

The New York Times notes that RCEP has been in the plans for eight years and describes it as “designed by Beijing partly as a counterweight to American influence in the region.” In other words, this is a chapter of a story that lives within the context of a massive and continual decades-long shift of momentum in the global economy. The center of gravity of the global economy has been silently but steadily migrating from the North Atlantic following World War II on a south-eastward course toward Asia.

Back in 2015, Reuters market analyst John Kemp pointed to the West’s failure to sense this movement, stating that “Most western policymakers and journalists view the world economy through a framework that is 10-15 years out of date.” He further points out that “India’s economy has also started to become a major source of global growth, which will ensure the centre of gravity continues to move more deeply into Asia over the next 50 years.” Analysts who have even attempted to assess the speed of the shift appear to agree on a “rate of about 100 kilometres or more per year.” It may have accelerated since 2015, and even intensified as a consequence of the implicit isolationism of Trump’s “America First” philosophy.

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Fearful of the threat to US hegemony posed by the RCEP, the Obama administration launched the Trans-Pacific Partnership (TPP), designed to eclipse the RCEP and protect some of the key historical advantages that underpinned US economic hegemony. Once Trump decided to leave the TPP, the US could no longer take advantage of its provisions to protect industrial property rights or oblige other nations to respect unified labor standards.

The US has literally been left behind in the race to define and enforce the rules that will govern commerce and economic development throughout the Asia zone over the next 50 years. Most commentators suspect that once president-elect Joe Biden is in office, he will not in the short term make an effort to catch up. In the midst of a complex health and economic crisis, there are other priorities. But Jeffrey Wilson’s comment about “Indo-Pacific’s post-COVID recovery” reveals that Asia, under China’s leadership, today has a clear head start and can set the tone for what a post-coronavirus world will look like. This is a question every nation is grappling with. There are no obvious answers. But there can be little doubt that the world that emerges once COVID-19 is completely under control or eradicated will be very different from what preceded the pandemic.

The Times signals the fact that “to some trade experts, the signing of the R.C.E.P. shows that the rest of the world will not wait around for the United States.” Many commentators have noted that four years of Donald Trump have convinced European leaders that depending on the ideological and geopolitical framework provided by the US is too risky an engagement. It may even transpire that, despite the intensified military cooperation between India and the US directed against the Chinese threat, as reported in this column by Vikram Sood, Atul Singh and Manu Sharma, India could eventually be attracted to the RCEP. Security is one thing. A humming economy is another.

India could, for example, be positioned to profit from a key feature of RCEP. The Times quotes Mary Lovely, a senior fellow at the Peterson Institute for International Economics in Washington, who notes that “R.C.E.P. gives foreign companies enhanced flexibility in navigating between the two giants. Lower tariffs within the region increase the value of operating within the Asian region, while the uniform rules of origin make it easier to pull production away from the Chinese mainland while retaining that access.” Narendra Modi’s India has not yet managed to fulfill its promises to expand manufacturing in India. Could RCEP be the key to providing conditions favorable to that evolution?

In short, the world is faced with a formidable number of variables that combine in a variety of different ways. As Brexit demonstrated, today’s political alignments can be nullified in a trice as the perception of economic opportunities and the pressure of uncontrollable crises such as the COVID-19 pandemic lead to new geopolitical configurations. Those trends are far more powerful than bilateral agreements.

Historical Note

Asia’s Regional Comprehensive Economic Partnership will only begin to produce practical effects two or three years down the line. But it already opens channels of communication and coordination between fifteen countries. This will not only confirm the shift of the global economy’s center of gravity but also accelerate the shift toward a new power relationship between the US and China. As the recent presidential campaign highlighted, Americans tend to see this as a binary relationship. Yet all the indicators point toward a multipolar reordering.


The Times article reminds readers of the historical situation when RCEP was first proposed: “The prospect of China’s forging closer economic ties with its neighbors has prompted concern in Washington. President Barack Obama’s response was the T.P.P.” Trump’s action upon taking office of killing the TPP before it could be signed opened the door to the eventual 15 nation agreement, with the roles of the US and China inverted. Obama designed the TPP to allow China in through the back door. RCEP is designed to allow the US in through the back door.

The world awaits the evolution and hoped-for denouement of a series of crises nested each within the other. However painful and disruptive, these crises have the merit of signaling the existence of a common interest for all of humanity in stark contrast with the traditional model of geopolitical reasoning based on national rivalries. It is in everyone’s interest to keep our eyes fixed on the slow but deep movements of history as well as the superficial ones that the media throw in our faces every day.

*[In the age of Oscar Wilde and Mark Twain, another American wit, the journalist Ambrose Bierce, produced a series of satirical definitions of commonly used terms, throwing light on their hidden meanings in real discourse. Bierce eventually collected and published them as a book, The Devil’s Dictionary, in 1911. We have shamelessly appropriated his title in the interest of continuing his wholesome pedagogical effort to enlighten generations of readers of the news. Read more of The Daily Devil’s Dictionary on Fair Observer.]

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

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