Last month, China and 15 other Asia-Pacific nations signed the Regional Comprehensive Economic Partnership (RCEP). After nearly a decade in the making, this free trade deal includes global powers such as Japan, South Korea, Australia, and New Zealand–and marks the first time that China, Japan, and South Korea are in a trade deal.
The members of the Association of Southeast Asian Nations — a group of 10 countries that signed the agreement — said that it would eliminate tariffs and quotas on 65% of the goods that are traded in the region.
RCEP’s combined population of over 2 billion makes it one of the world’s largest trading blocs, accounting for more than a third of the global population. Sitting out, however, is the world’s largest economy–the United States.
In a press conference, President-elect Joe Biden expressed interest in exploring trade relationships with other democracies not involving China.
Biden said that the U.S., which makes up 25% of the global economy, needs to align with other democracies, “another 25% or more, so that we can set the rules of the road instead of having China and others dictate outcomes because they are the only game in town.”
While some experts say the trade deal will give China no additional benefits, some are expressing concern that the U.S. is sitting this one out.
Former U.S. Trade Representative Wendy Cutler wrote in a recent commentary, “RCEP is another reminder that our Asian trading partners have developed a confidence about working together without the United States.”
The deal may give eastern countries the idea that China is the new leader in trade and rule-making.
While Biden and other officials are correct in attempting to make connections outside of the region, it’s also important to maintain those connections.
“The United States should however adopt a more forward-looking, strategic effort to maintain a solid US economic presence in the region,” said Myron Brilliant, US Chamber of Commerce executive vice president and head of international affairs. “Otherwise, we risk being on the outside looking in as one of the world’s primary engines of growth hums along without us.”