by Pepe Escobar with permission and first posted on Asia Times
Ho Chi Minh, in his eternal abode, will be savoring it with a heavenly smirk. Vietnam was the – virtual – host as the 10 Asean nations, plus China, Japan, South Korea, Australia and New Zealand, signed the Regional Comprehensive Economic Partnership, or RCEP, on the final day of the 37th Asean Summit.
RCEP, eight years in the making, binds together 30% of the global economy and 2.2 billion people. It’s the first auspicious landmark of the Raging Twenties, which started with an assassination (of Iran’s Gen. Soleimani) followed by a global pandemic and now ominous intimations of a dodgy Great Reset.
RCEP seals East Asia as the undisputed prime hub of geoeconomics. The Asian Century in fact was already in the making way back in the 1990s. Among those Asians as well as Western expats who identified it, in 1997 I published my book 21st: The Asian Century (excerpts here.)
RCEP may force the West to do some homework, and understand that the main story here is not that RCEP “excludes the US” or that it’s “designed by China”. RCEP is an East Asia-wide agreement, initiated by Asean, and debated among equals since 2012, including Japan, which for all practical purposes positions itself as part of the industrialized Global North. It’s the first-ever trade deal that unites Asian powerhouses China, Japan and South Korea.
By now it’s clear, at last in vast swathes of East Asia, that RCEP’s 20 chapters will reduce tariffs across the board; simplify customs, with at least 65% of service sectors fully open, with increased foreign shareholding limits; solidify supply chains by privileging common rules of origin; and codify new e-commerce regulations.
When it comes to the nitty gritty, companies will be saving and be able to export anywhere within the 15-nation spectrum without bothering with extra, separate requirements from each nation. That’s what an integrated market is all about.
When RCEP meets BRI
The same scratched CD will be playing non-stop on how RCEP facilitates China’s “geopolitical ambitions”. That’s not the point. The point is RCEP evolved as a natural companion to China’s role as the main trade partner of virtually every East Asian player.
Which brings us to the key geopolitical and geoeconomic angle: RCEP is a natural companion to the Belt and Road Initiative (BRI), which as a trade/sustainable development strategy spans not only East Asia but delves deeper into Central and West Asia.
The Global Times analysis is correct: the West has not ceased to distort BRI, without acknowledging how “the initiative they have been slandering is actually so popular in the vast majority of countries along the BRI route.”
RCEP will refocus BRI – whose “implementation” stage, according to the official timetable, starts only in 2021. The low-cost financing and special foreign exchange loans offered by the China Development Bank will become much more selective.
There will be a lot of emphasis on the Health Silk Road – especially across Southeast Asia. Strategic projects will be the priority: they revolve around the development of a network of economic corridors, logistic zones, financial centers, 5G networks, key sea ports and, especially short and mid-term, public health-related high-tech.
The discussions that led to the final RCEP draft were focused on a mechanism of integration that can easily bypass the WTO in case Washington persists on sabotaging it, as was the case during the Trump administration.
The next step could be the constitution of an economic bloc even stronger than the EU – not a far-fetched possibility when we have China, Japan, South Korea and the Asean 10 working together. Geopolitically, the top incentive, beyond an array of imperative financial compromises, would be to solidify something like Make Trade, Not War.
RCEP marks the irredeemable failure of the Obama era TPP, which was the “NATO on trade” arm of the “pivot to Asia” dreamed up at the State Department. Trump squashed TPP in 2017. TPP was not about a “counterbalance” to China’s trade primacy in Asia: it was about a free for all encompassing the 600 multinational companies which were involved in its draft. Japan and Malaysia, especially, saw thought it from the start.
RCEP also inevitably marks the irredeemable failure of the decoupling fallacy, as well as all attempts to drive a wedge between China and its East Asian trade partners. All these Asian players will now privilege trade among themselves. Trade with non-Asian nations will be an afterthought. And every Asean economy will give full priority to China.
Still, American multinationals won’t be isolated, as they will be able to profit from RCEP via their subsidiaries within the 15-nation members.
What about Greater Eurasia?
And then there’s the proverbial Indian mess. The official spin from New Delhi is that RCEP would “affect the livelihoods” of vulnerable Indians. That’s code for an extra invasion of cheap and efficient Chinese products.
India was part of the RCEP negotiations from the start. Pulling out – with a “we may join later” conditional – is once again a spectacular case of stabbing themselves in the back. The fact is the Hindutva fanatics behind Modi-ism bet on the wrong horse: the US-fostered Quad partnership cum Indo-Pacific strategy, which spells out as containment of China and thus preclude closer trade ties.
No “Make in India” will compensate for the geoeconomic, and diplomatic, blunder – which crucially implies India distancing itself from the Asean 10. RCEP solidifies China, not India, as the undisputed engine of East Asian growth amid the re-positioning of supply chains post-Covid.
A very interesting geoeconomic follow-up is what will Russia do. For the moment, Moscow’s priority involves a Sisyphean struggle: manage the turbulent relationship with Germany, Russia’s largest import partner.
But then there’s the Russia-China strategic partnership –which should be enhanced economically. Moscow’s concept of Greater Eurasia involves deeper involvement both East and West, including the expansion of the Eurasia Economic Union (EAEU), which, for instance, has free trade deals with Asean nations such as Vietnam.
The Shanghai Cooperation Organization (SCO) is not a geoeconomics mechanism. But it’s intriguing to see what President Xi Jinping said at his keynote speech at the Council of Heads of State of the SCO last week.
This is Xi’s key quote: “We must firmly support relevant countries in smoothly advancing major domestic political agendas in accordance with law; maintaining political security & social stability, and resolutely oppose external forces interfering in internal affairs of member states under any pretext.”
Apparently this has nothing to do with RCEP. But there are quite a few intersections. No interference of “external forces”. Beijing taking into consideration the Covid-19 vaccine needs of SCO members – and this could be extended to RCEP. The SCO – as well as RCEP – as a multilateral platform for member states to mediate disputes.
All of the above points to the inter-sectionality of BRI, EAEU, SCO, RCEP, BRICS+ and AIIB, which translates as closer Asia – and Eurasia – integration, geoeconomically and geopolitically. While the dogs of dystopia bark, the Asian – and Eurasian – caravan – keeps marching on.
i’m curious why russia wasn’t included. it’s possible xi & putin agreed including russia would alert the usa & eu & prevent oz & japan from joining & that russia would be included in due course, but that may be wishful thinking.
Russia comes with EAEU which will integrate as Eurasian Integration unfolds. BRI+EAEU is how Xi and Putin are working it out.
Russia is unique. It is an outsider with EU and an outsider with ASEAN+, but it has good trade relations with all the nations that matter.
Presently, Russia is developing its economy primarily to develop the domestic sector, with trade linked to products and services others need and want, like wheat, oil, gas, weapons.
With China in great need of what Russia produces, Russia doesn’t need a free trade arrangement yet. China buys huge amounts of Russia’s exports.
Taiwan should be included. The Stalinist dictatorship of China can not call all the shots. Russia should also be includes. The world needs to unite to free itself of western domination.
Saying “The world needs to unite to free itself of western domination” in the same breath as “Stalinist dictatorship”–a figment of a Western-dominated mind, does not inspire confidence.
Stalin freed the USSR of Western domination. If China’s leadership is Stalinist, then that’s a most compelling quality label!
”The world needs to unite to free itself of western domination.” Yes, starting with Hong Kong and Taiwan.
The western domination cannot end until decolonization of occupied lands, namely the Turtle Island, Australia, New Zealand etc.
Lol, someone who reads the saker website but still retains brainwashed mind of one infused with western msm propaganda, amazing indeed. Yes
If the RCEP respects national sovereignties, then it’s ideal.
I still remember when Global Research alerted on the horrors of the TPP. Transnational corporations would be able to bypass any local jurisdiction, appoint judges and override any trace of State power within signatory countries. A globalist hell.
Trump opted out of it due to his own American interest, but he did a favour to the entire world.
About Russia: I believe Russian leadership wants to secure EAEU integration first.
”India was part of the RCEP negotiations from the start. Pulling out – with a ’we may join later’ conditional – is once again a spectacular case of stabbing themselves in the back. The fact is the Hindutva fanatics behind Modi-ism bet on the wrong horse: the US-fostered Quad partnership cum Indo-Pacific strategy, which spells out as containment of China and thus preclude closer trade ties.”
Hindutva, along with the Ukronazis, illustrates the utter bankruptcy of fascism. Mind you, there was a time when fascism actually had something to show for it — certainly at the cost of persecution, lawlessness, and warmongering — such as low unemployment, social safety (for the majority population), industrial prowess. Modi is a, shall we say, ”modern fascist”, taking pride in being equally reactionary and incompetent, only trying effortlessly to stir up trouble to strong, competent, and very successful neighbouring countries to prove his worth as a silly plaything.
”We must firmly support relevant countries in smoothly advancing major domestic political agendas in accordance with law; maintaining political security & social stability, and resolutely oppose external forces interfering in internal affairs of member states under any pretext.”
Guess that Western ’progressives’ will be rallying instantly behind Soros and the neocons with all their usual ”anti-authoritarianism”, LOL.
”TPP was not about a ’counterbalance’ to China’s trade primacy in Asia: it was about a free for all encompassing the 600 multinational companies which were involved in its draft.”
Exactly. The main idea behind it — with China’s demise a very significant bonus — was to ditch common international law de facto, replacing the latter with the neoliberal wet dream of all-powerful, fascistic company law, outlawing protective measures by states and civil society against the designs and deliberations of unrestrained, greedy corporatocracy.
Even without India in the RCEP, the Quad still can torpedo the RECP. This is because the RECP has two trojan horses in it – Japan and Australia.
And I don’t think the USA will allow the RCEP to stand. As usual, when diplomacy fails, the USA, like the British before, will use military means to destroy the RCEP.
Japan and Australia is likely to sign an anti-China alliance and try to rope in South East Asian nations like Vietnam and Indonesia. And provoke China by conducting military exercise in the South Chia Sea, Taiwan Straits and East China Sea with the USA.
If military conflict breaks out, even a limited one, it would mean the end of the RCEP.
And in its place, the USA hopes to implement the TPP or Japan’s version of it – the CPTPP.
And India will gladly jump in to join the CPTPP. So the Indian move to stay out of the RCEP is not as dumb as it appears.
No way the USA will let the RCEP stand. The next (military) move is in the USA-led QUAD’s court.
Is anyone aware if this Asean trade agreement limits the legal powers of corporations to sue participating countries? This was one of the worst aspects of the TPP and Australia was quite happy to sign our legal rights away. I am just wondering if this trade agreement respects the sovriegnty of nations.
I recall the TPP had already failed due to Canada refusing to sign and also internal politics in the US itself, Trump taking it off the table was a good move but as far as I can tell, that he did not do this until the deal was already dead in the water. I suspect self interest rather than any concern for fairness.
Unlike the TPP, this has nothing in it about MNCs being able to sue already dirt poor countries. The agreement simply aims to reduce tarriffs across the board for all countries in the agreement.
As you stated –
“RCEP solidifies China, not India, as the undisputed engine of East Asian growth amid the re-positioning of supply chains post-Covid.”
This is Xi’s key quote: “We must firmly support relevant countries in smoothly advancing major domestic political agendas in accordance with law; maintaining political security & social stability, and resolutely oppose external forces interfering in internal affairs of member states under any pretext.”
So, China will not only be ‘the engine of growth’ but also have the ‘social right’ to to interfere in the internal affairs of ‘relevant countries’. In effect, China is now very much stronger both economy wise as well as in geopolitics. Under such circumstances why should India help China by becoming a party to RCEP ?
If RCEP is an agreement between net exporters, why should India which is a net importer and without any benefits become a party to it ?
Apparently, we now have many flippant China apologists.
The Hegemon is dead, long live the new Hegemon !
How good that India can keep itself pure, as it disappears down the world trade plughole. India it would appear just cannot stop scoring match losing own goals. All this, as it tries to curry favour with its masters in the fast crumbling Empire.
@gavishti,
You contrive a lot in this comment of yours.
“resolutely oppose external forces interfering in the internal affairs of member states” is not license to some “social right” (your invention) to interfere in the internal affairs of relevant countries. “Oppose” is a tool of diplomacy and information. It’s a pretty soft term in the world of geopolitics.
The world is aligned in all but the West against any new Hegemon. Asia, in particular, is against China becoming a dominant singular force. Do you really believe the Vietnamese and Japan would join this RCEP if they thought it empowered China? Get real.
India has an idiotic leadership right now. He has screwed up opportunities with Iran, with China, with Russia and has set sail as one of the QUAD, desires equality with great nations that see weakness not strength in India as it presently operates.
Its best bet would be to rid itself of Modi as soon as possible, and begin to find its own destiny within Eurasia. Joining the hegemonic containment of China is a dead end. Tap into the talents and creativity of Indian people to invent and innovate and produce products for export. Develop zones for tourism that are safe, healthy and up to world class standards. Hard cash revenues and jobs will benefit the zones. India has solutions available. Modi turns away from them.
The Indian elite sees itself as the rightful inheritor of the East India Company. In contrast China sees itself as its victim.
Therin lies the key difference between the two countries and goes a long way to explain India’s behavior on the international stage.
Until and unless India develops its own worldview and its place in the world it will get nowhere.
As they say, there is no helping stupid. Its not possible to save irrational people from themselves. Enough said.
My prediction- when it comes to the crunch,the US will throw India under the bus and China will come to India’s rescue.
gavishti,
Sorry, I don’t follow your argument.
Xi’s statement: “We must firmly support relevant countries in smoothly advancing major domestic political agendas in accordance with law; maintaining political security & social stability, and resolutely oppose external forces interfering in internal affairs of member states under any pretext.”
This was addressed by Xi to the SCO, not RCEP. At any rate how does this statement by Xi give an indication that PRC has the ‘social right’ to interfere in the internal affairs of ‘relevant countries’ as you argue? Doesn’t it indicate, instead, PRC’s respect for other countries’ sovereignty?
PRC was initially opposed to India’s involvement in RCEP but others, principally ASEAN, managed to get it to agree to India’s participation. Unfortunately India pulled out after all the work done by the group. It’s no loss to China — in fact it should be delighted — and an opportunity lost for India to engage more closely with the region. Now, as far as Modi’s India is concerned, it’s the Indo-Pacific strategy without the Pacific.
I can say more but Pepe’s ‘The same scratched CD will be playing non-stop on how RCEP facilitates China’s “geopolitical ambitions” ‘ should suffice.
gavishti,
I think you are on to something, mate.
Cheers
Jamshyd,
I’m least concerned about the present Indian leadership. However, I do believe the right decision was made by India in not becoming a party to RCEP. As said earlier, India is a net importer whilst the present members of RCEP are net exporters, India cannot become a dumping ground for their goods, products and services without reciprocal benefits.
President Xi’s statement –
“We must firmly support relevant countries in smoothly advancing major domestic political agendas in accordance with law; maintaining political security & social stability ; maintaining political security & social stability, and resolutely oppose external forces interfering in internal affairs of member states under any pretext.”
drools of intervention by China in a whole range of affairs in relevant countries, but most certainly – ‘in accordance to law’.
Thank you for your comment 🙏
jurgen & donald duck — We need to explain things in simple English:
— Taiwan, as a Chinese province, IS included in RCEP through her motherland, the People’s Republic of China.
— Western domination of propaganda is why stuart estrine believes that Taiwan is a sovereign nation, just like the other ‘sovereign nation’, Hong Kong!!!
— To free the world of Western domination, we must first educate ourselves, and weigh all things in right balance.
Rafael & Larchmonter445 — India today reminds me of the days of the WOG, those Western-Oriented Gentleman, of the 1960s and 1970s, when English-speaking Indians used to think themselves more English than the English.
While they may gain a front row seat at the cricket pavilion of their local British Club, the real English never stopped thinking of them as cartoons; as useful go-betweens with the natives, even as useful idiots.
Modi’s conduct reminds me of those WOGs, whose error the young commenters here will do well to research.
That was why I asked, over at Moon of Alabama, whose interest did Modi serve when he refused to join RCEP? His personal interest? or the interest of 1,000,000,000 Indian’s?
Modi is a rightous fool who never misses an opportunity to make huge strategic blunders that sabotage India’s future.
He is desirous of US leadership and asks how high, whenever the US says jump and he thinks of apartheid Israel as a “role model”, so he has sought to mimic their policies in Kashmer.
To please the Americans and the Israelis, the Modi government dragged its feet on development deals that it had with Iran – that would have benefitted Indian tremendously- so the Iranians got fed up and is pivotting to China.
Modi is a liability that Indians should discard.
Selah
‘While the dogs of dystopia bark ….’
There is a painting in a tiny gallery around the corner showing the crux of the matter. Although a smaller gallery it has the bigger picture. The Chinese are winning.
And the hole the U.S. digs for itself gets deeper by the day. There’s no turning back now.
The West’s propaganda machine used to cheer the Asian Tigers throughout the 1970s and 1980s, selling the idea of the Flying Geese pattern where Japan, Taiwan, South Korea, Hong Kong, Singapore would be powerhouse economies in turn.
The world cheered even louder when Deng opened China to modernisation. Lee Kuan Yew, whom Kissinger eulogised as one of his teachers, noted in a 2013 interview with The Atlantic that China’s arrival as a modern economy onto the world stage is not only a gigantic, but a historic displacement that cannot be stopped.
Yet, the cheering stopped, when in an oopsie moment, Obama, that great teleprompter reader, announced The Pivot. Why? Did the West have a change of mind? or did they see that China, unlike the WOGs of India, has her own mind, which is to serve her people, not the bankers, above all else.
And now we see 30% of the world’s population under one trade umbrella.
Long live Asia.
Long live RCEP.
Grow Rice, Not War.
Made in China Teslas got cheaper overnight. Win-win.