The ASEAN summit series held in Bangkok, Thailand, in early November will have two major highlights. One is the US’s “downgraded participation” and the other is the strong promotion of the Regional Comprehensive Economic Partnership Agreement (RCEP). The connection between the two, and its impact on the Asian economic landscape, have a common point, that is, the United States may be losing the Asian economic chess game.
Historically, the United States has been the shaper and defender of the Asian economic order. However, the status quo and trend is that Asia has already possessed endogenous, self-growth capabilities in terms of economic rules and order. In this process, the role of the United States is diminishing, but it has not yet and is not willing to leave.
On November 4, the 16 member states of the RCEP issued a joint statement after the Third Leadership Meeting in Bangkok, stating: “15 RCEP member states have concluded all 20 chapters of text negotiations and virtually all market access issues. Negotiations. We instructed them to initiate a review of the legal texts in order to sign the agreement in 2020. “The statement also mentioned:” India has important issues that have not yet been resolved. All RCEP member states will work together to resolve these outstanding issues in a mutually satisfactory manner. . India’s final decision will depend on the successful resolution of these issues. ”
The clear message conveyed by the statement is that India’s temporary” do not join “does not affect RCEP’s continued progress. Among the 16 member states of RCEP, India’s economic aggregate ranks third after China and Japan. The absence of India’s RCEP means that the total economic volume covered by this multilateral free trade agreement has dropped from the world’s largest ($ 25.4 trillion) to the world’s third (ranked after the EU-Japan Free Trade Agreement and the US-Mexico-Canada Trade Agreement) . The weight of India is self-evident. Because of this, the RCEP negotiations in recent years have largely taken care of India’s concerns. For example, arrangements originally intended to complete the negotiations in 2018 have slowed down in consideration of India’s election.
This time India “don’t get on the bus”, the other 15 member states no longer wait, which undoubtedly further highlights the “strength” of RCEP in its promotion. The strength comes from the confidence. Asia is not only the most active and fastest growing region in the world economy, but also a vital link in the global value chain. Although India has a heavy weight, it still does not play a “qualitative” role for RCEP. On the contrary, after the formation of RCEP, India remaining outside of RCEP will lose its strategic influence in Asia and its ability to participate in regional supply chains.
Another factor that underscores the strength of RCEP is the US factor. More specifically, it is the policy actions of the Trump administration that have stimulated the rapid progress of RCEP negotiations. Asia’s economic vitality benefits from a free and open economic and trade system, and the United States was the defender of this system. The Trump administration’s withdrawal from the already negotiated Trans-Pacific Partnership Agreement (TPP), arbitrarily increasing tariffs and wantonly provoking a trade war, in fact turned the United States from a defender of order into a disruptor. Australian National University professor Peter Dresdell wrote that the RCEP negotiations are not easy, but Asia’s resistance to protectionist needs has made it easier to make choices.
”Making choices easier” can be seen in the changing enthusiasm of participation in some countries. In addition to the RCEP to be signed, the multilateral free trade agreement in Asia also has a “shrink version” of TPP-the “Comprehensive and Progressive Trans-Pacific Partnership Agreement” (CPTPP). Prior to the Trump administration’s withdrawal in January 2017, TPP was a more attractive regional free trade agreement “star”, while RCEP was relatively tepid.
When the TPP was about to conclude negotiations in 2016, South Korea seriously considered joining the TPP and started relevant negotiations, but after Trump took over the White House, South Korea put this idea on the shelf. Behind the shelves is Malaysia. The Mahathir government has in fact frozen the approval process for CPTPP and has shifted its focus to RCEP negotiations.
The importance of Western developed markets to East Asia has returned to 20 years ago. These 20 years are the period when East Asia’s industrial chain is taking shape and its internal market is mature.
Compared with RCEP, TPP and subsequent CPTPP are characterized by “high standards and strict requirements”. Therefore, the countries participating in CPTPP in Asia, except Vietnam and Malaysia, are developed economies (Japan, Singapore, Brunei). A recent article in the United States’ Foreign Policy states that RCEP members like Australia and New Zealand were initially enthusiastic because of RCEP’s mild provisions, but they were more willing when Trump felt the chill of the global economy with a trade war The next best thing is to help defend the threatened economic and trade order.
The Trump administration ’s actions to undermine order have objectively given the RCEP a mission to defend order. This is also an important reason why RCEP has become stronger. Professor Renuka Mahadwin of the University of Queensland in Australia believes that in the context of escalating U.S.-China trade frictions and stagnation of WTO reforms, many countries strongly hope that the RCEP will conclude negotiations at the end of 2019. In her view, advancing RCEP is not only a positive act to promote trade liberalization, but also a strong signal to maintain a rules-based trading system.
Asia is merging
Why is this signal so important? Because of the signing of the RCEP, it is destined to be a historic node of economic and trade integration in Asia.
From the perspective of the global economic structure, the traditional impression of Asia to the outside world is the production base, which is “factory Asia”. But this perception has fallen behind. Australian think tank Roy Institute scholar Greg Earl pointed out in a recent article that there is increasing evidence that a “market Asia” that is independent of the global economic system is emerging, and the signing of the RCEP will be to a considerable extent Facilitate the transformation of “Factory Asia” to “Market Asia”.
A September report by the McKinsey Global Institute titled “The Future of Asia” states that with the increase in economic activity within the region, Asia has become “more Asian.” According to the report, if the intra-Asian region is compared with the overall external relations, the current trade in goods in the Asian region accounts for 60% of the total foreign trade in goods, and the proportion of foreign direct investment in the region is 59%. In terms of personnel flow, the proportion of cross-border tourists in the region of Asian civil aviation is 74%. In the newly-started investment sector, investment from within Asia accounted for 71%. An indisputable fact is that the activity of Asian trade and economics is positively related to the closeness of internal relations.
Roland Raja, director of the Roy Institute’s International Economics Program, also draws the conclusion that the Asian economy is “self-driven” by comparing historical dimensions. In a research report on “Decoupling of East Asia” in January this year, he said that East Asian economies were showing a trend of independence from Western developed countries. According to Raja’s research, in 2007, the share of East Asian exports absorbed by the United States, the European Union, and other western developed countries was 45.5%, but this proportion fell to 35.6% in 2017. During the same period, the share of East Asian self-absorbed exports increased from 32.0% to 40.3%. More crucially, East Asia remained the fastest-growing region in the world during this period.
In Raja’s view, the importance of markets in developed western countries to East Asia has returned to 20 years ago. These 20 years are the period when East Asia’s industrial chain is taking shape and its internal market is mature. In particular, he emphasized that this change in the East Asian economy is structural, that is to say, it has a considerable degree of irreversibility. The irreversible outstanding performance is that before, East Asian industrial integration mainly served Western markets, but now it is shifting to serve regional demand. Raja believes that the key factor is the change in China’s economic role. “At present, China has consolidated its core position in the regional economy. This is reflected not only in China’s role as the core of the regional industrial chain, but also in its ability to surpass the United States as the largest absorber of exports within the region.”
Asia’s integration, objectively Decoupling the Trump administration’s pursuit from the Chinese economy is not realistic. Asia’s economic interests have largely depended on its links with the Chinese economy. The US “Foreign Policy” in an article titled “Trump Raises High Tariff Walls and Asia Bets on Free Trade” states that when the Trump administration tried to decouple the US-China economy and force foreign manufacturing companies to move out of China, RCEP However, it is strengthening regional economic integration in Asia and isolating the United States from the region economically and strategically.
”The world is dividing, but Asia is converging.” Peter Dresdell likens RCEP to an oasis in a protectionist desert. In his opinion, the significance of RCEP is not limited to the economic level. It can have a significant impact on the common prosperity and political security of the Asia-Pacific region by building political certainty and mutual trust. “When the world is fragmented, RCEP provides a beacon of hope. It shows that the country with the most active and fastest-growing economy still believes in cooperation and openness.” The
McKinsey Global Institute’s research report believes that Asia has formed an economy The Internet is defining the economic globalization of the next 10 years.
America has fallen behind
In “the next 10 years of economic globalization,” the United States has fallen behind, at least for now.
As for the Trump administration ’s “downgrade participation” ASEAN summit this year, ASEAN responded with a “downgrade reception”. At the U.S.-ASEAN summit in Bangkok, except the host countries Thailand, Vietnam and Laos, seven other ASEAN countries sent ministerial officials. This time, the United States is led by Trump’s national security adviser O’Brien, whose visibility is very limited.
Although O’Brien attended the meeting with the title of “Presidential Envoy”, this did not change the perception that the Trump administration ignored ASEAN. After Obama participated in the ASEAN summit series for the first time in 2009, he attended the summit every year except in 2013 (because the US federal government closed). In 2017, Trump participated in the ASEAN summit series, but did not attend the US-ASEAN summit and returned home early. In 2018, he sent Vice President Pence. Some media have done statistics. During the 2019 summit period, Trump tweeted 96, none of which were about the ASEAN summit.
A third-class team means that the United States regards the ASEAN summit as a third priority, which is an insult to a culturally and politically “face-conscious” region.
Trump’s only appearance in East Asia in 2018 was the first summit with North Korean leader Kim Jong Un in Singapore that June. So far in 2019, Trump has visited Asia, one in February this year with Kim Jong Un in Hanoi, Vietnam, and two more visits to Japan (and a visit to South Korea, meeting Kim Jong Un on the 38th line). Although the Indo-Pacific strategy report released by the Trump administration emphasizes the strategic significance of the Indo-Pacific region to the United States and also highlights the importance of Southeast Asia with considerable length, its policy actions are difficult to associate with the importance of this region.
”To get your wrists, you have to enter.” The Washington Post argues that “Donald Trump and the grand strategy are incompatible words.” The article wrote about Trump ’s absence from the ASEAN summit series. He wrote that Trump is not there, and even Vice President Pence and the Secretary of State are not there. This is an insult in culturally and politically “face-conscious” areas. If it is said that the Southeast Asian countries lost face, the United States is likely to lose the Asian economic chess game.
The establishment of ASEAN in 1967, one of the important purposes is to cushion the negative impact of the US-Soviet hegemony on Southeast Asia. The logic behind this is not difficult to understand, as small and medium-sized countries can better safeguard their strategic interests only when the major countries’ strategic competition is prominent. Prior to the launch of the RCEP negotiations in 2013, there were two regional integrations: China’s assertion of ASEAN 10 + 3 (that is, 10 ASEAN countries plus China, Japan, and South Korea) and Japan’s assertion of ASEAN 10 + 6 (plus India, Australia, and New Zealand) The mode. Although the final RCEP idea is ASEAN 10 + 6, both China and Japan agree that the negotiation process will be led by ASEAN, in fact avoiding strategic competition among the major powers in the region.
The key reason why Southeast Asian countries value “ASEAN dominance” is because they do not want to be involved in the strategic competition of the major powers. However, the Trump administration ’s Indo-Pacific strategy focuses on strategic competition with China and attempts to shape the Asian economic landscape from the perspective of strategic competition. Both the Trump administration ’s Indo-Pacific strategy report and the public statements of its senior officials have deliberately or unintentionally pressured Asian countries to “select sides” between China and the US. Indonesian President Joko called for the US-Indo-Pacific vision to include China, saying that ASEAN has no choice but to cooperate with China. Even the US ally, Australian Prime Minister Morrison, has also publicly stated that Australia does not need and will not “select a side station.”
The RCEP’s desire is indisputable to show that the commitment of Asian countries to a free and open economic and trade system, and the reality of the Asian economy’s integration, and the strategic design of the Trump administration ’s big power competition and the idea of controlling trade are fundamentally “Mutually incompatible”. This is an important reason why the United States may be losing the big chess game in Asia.