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A huge free trade bloc will be created in the Asia-Pacific region. Japan must exercise its leadership to ensure the region’s healthy development.
It was decided that the Regional Comprehensive Economic Partnership (RCEP), a free trade agreement among 15 countries, including Japan, China, South Korea and members of the Association of Southeast Asian Nations (ASEAN), will come into effect on Jan. 1 next year.
Eight countries, including Japan and China, have already ratified RCEP. In addition, Australia and New Zealand have completed procedures needed for its effectuation, thus meeting the requirement for the pact to take effect. The pact will start with those 10 countries at first.
The 15 nations together have a population of about 2.3 billion people and their total gross domestic product is about $26 trillion (about ¥3 quadrillion), each of which accounts for about 30% of the global total. RCEP will be Japan’s first free trade agreement involving both China and South Korea.
RCEP is designed to eliminate tariffs on 91% of goods, a lower level than the nearly 100% covered by the Trans-Pacific Partnership (TPP) free trade agreement. However, it is expected to stimulate trade and investment and improve the efficiency of the supply network, among other benefits.
It is desirable to utilize RCEP in order to revive the still stagnant Japanese economy by capitalizing on the growing markets in Asia.
What is worrisome is China’s expanding influence. While China is eager for RCEP to come into effect as soon as possible, India, which initially had been negotiating to join RCEP, withdrew from the pact mainly due to concerns over a rising trade deficit.
Because India had been expected to act as a counterweight to China, its withdrawal was a blow to other countries concerned. Japan needs to persistently urge India to return to the negotiations.
China has also formally applied to join the TPP. It is said that China has been lobbying TPP member countries such as New Zealand and Singapore to support China’s membership.
However, China currently does not meet the conditions for joining the TPP due to such problems as unfair subsidies to state-owned enterprises and infringement of intellectual property rights.
First of all, China needs to build up a track record of rule compliance as a member of RCEP. Many countries participate in both the TPP and RCEP. To prevent RCEP from becoming merely a convenient framework for China, it is absolutely necessary for other RCEP member nations to cooperate to monitor how China observes the rules.
China continues provocations in the South China Sea and the East China Sea, oppresses human rights in Hong Kong, and also is making unprecedented military threats to Taiwan. China’s hegemonic movements in the Asia-Pacific region are only intensifying.
The TPP was originally intended not only to promote trade and investment but also to contain China’s growing presence in terms of the economy and security.
The functioning of RCEP and the issue of China’s joining the TPP will be crucial for Japan’s foreign policy. It is essential for Japan to make the utmost diplomatic efforts to maintain international order in the region.
— The original Japanese article appeared in The Yomiuri Shimbun on Nov. 5, 2021.
