- RCEP is considered to be a regional free trade agreement led by China against the United States.
- ASEAN countries hope that this agreement can be a good medicine to heal the economy that has been hit hard by the epidemic.
- After years of negotiations, it is finally expected to be signed on Sunday.
The 37th ASEAN Summit opened on Thursday, and the meeting was held through video. In addition to the immediate new coronavirus epidemic, the fifteen member states are also expected to sign the Regional Comprehensive Economic Partnership Agreement (RCEP) on Sunday to revive the economy hit by the epidemic.
RCEP is considered to be a regional free trade agreement led by China against the United States. After years of negotiations, it is finally expected to be signed on Sunday. ASEAN countries hope that this agreement can be a good medicine to heal the economy that has been hit hard by the epidemic.
At the opening ceremony, Vietnamese Prime Minister Nguyen Xuan Phuc said that ASEAN should maximize resources and strength to gradually control the risk of the new coronavirus epidemic, obtain vaccines and effective treatment methods as soon as possible, improve preventive medical capabilities, protect people’s lives and health, and promote the resumption of work and production.
This meeting will formally adopt the “ASEAN Comprehensive Recovery Plan.” The Regional Comprehensive Economic Partnership Agreement (RCEP) was first proposed in 2012, and is regarded as an agreement led by China to counter US trade initiatives, covering China, Japan, South Korea, New Zealand, Australia and ten Southeast Asian countries .
The Regional Comprehensive Economic Partnership Agreement is seen as a clever plan for China to expand its influence in Asia. Malaysian Trade Minister Ali said before the virtual meeting, “after eight years of negotiations with blood, sweat and tears, we have finally reached the moment when the RCEP agreement will be signed this Sunday.”
In his speech at the opening ceremony of the online summit, Vietnamese Prime Minister Nguyen Xuan Phuc also confirmed that the agreement will be signed this weekend.
India originally intended to sign the agreement, but it withdrew from the negotiations last year because of concerns about China’s low-price dumping. However, if India changes its position, there will be opportunities to join in the future.
The economies covered by RCEP are equivalent to 30% of global GDP. Rajiv Biswas, chief economist for the Asia-Pacific region of IHS Markit, a global business consulting firm, said that if measured by GDP, RCEP will become the world’s largest free trade zone once it is signed.
Alexander Capri, a trade expert at the National University of Singapore Business School, said that RCEP is definitely conducive to China’s geopolitical ambitions. However, the difficulty that China will encounter is that the newly-elected US President, Joe Biden, is expected to be more active in communicating with ASEAN countries, just like his Democratic predecessor, Barack Obama.
The ten ASEAN countries that are expected to sign the RCEP have been affected by the new coronavirus epidemic in society and economy, and are currently fighting the virus.
Other issues have also changed their priorities due to the new coronavirus epidemic. For example, China’s expansion in the South China Sea poses a threat to neighboring countries.
It was originally expected to be a major focus of this ASEAN summit. However, in the context of the new coronavirus epidemic, many ASEAN member countries have already received China’s commitment to provide vaccines made by China. It is estimated that it will not be too difficult for China on the South China Sea issue.
In addition to being busy strengthening medical and health systems to deal with the epidemic, ASEAN countries also need to revive the economies that have been hit hard by the epidemic, especially those that rely on tourism and processing exports.
Kaewkamol Pitakdumrongkit, an assistant professor at the Multilateralism Research Center of S. Rajaratnam International Studies College (S. Rajaratnam), Singapore, said that RCEP helps countries alleviate financial problems.
“Such an agreement allows companies to diversify their supply chains and strengthen regional economy therefore helps countries to revive their economies faster in the face of the epidemic.”