US President Joe Biden, Indian Prime Minister Narendra Modi and Japanese Prime Minister Fumio Kishida attend the launch event of the Indo-Pacific Economic Framework for Prosperity (IPEF) at the Izumi Garden Gallery in Tokyo , Japan, May 23, 2022.
Jonathan Ernst | Reuters
Amidst the fanfare of US President Joe Biden new Indo-Pacific strategyChina flew within sight and held a high-level discussion on RCEP, the world’s largest trade pact.
It came a few days after Biden Administration Launches Indo-Pacific Economic Framework, or IPEF — a partnership that includes 13 countries, excluding China, as the United States seeks to expand its political and economic leadership in the Indo-Pacific region.
The Regional Comprehensive Economic Partnership (RCEP) The meeting on the southern island of Hainan highlighted analysts’ expectations that rather than reacting to or against the IPEF, China is likely to implement agreed trade agreements and take advantage of existing tariffs. implementation and market access.
“China will not take immediate or very targeted measures in response,” said Li Xirui, a trade scholar at the S. Rajaratnam School of International Studies at Singapore’s Nanyang Technological University of Technology. IPEF.
At the second RCEP Media & Think Tank Forum, held in Hainan’s capital Haikou the weekend after the IPEF was announced, NGO trade experts from the region gathered to discuss more on ways to expand trade within the bloc.
China is likely to continue to push for the adoption of RCEP as it gives member states access to a large market, which the IPEF lacks.
Li Xirui
S. Rajaratnam School of International Studies, NTU
RCEP includes China and the 10-member ASEAN bloc, along with Australia, Japan, South Korea and New Zealand.
Led by the Hainan government, the meeting also marked another attempt by the province to accommodate Beijing’s broader strategy of implementing RCEP since its debut earlier this year.
“Consistent with the support of multilateralism and globalization, China is likely to continue to push for the adoption of the RCEP as it allows member states to access the vast market that is not IPEF is missing,” Li told CNBC.
She said China is likely to retaliate against the US on any Its future Asia-Pacific economy grows by expanding its economic dominance in the region and developing trade under the RCEP.
Li added that Beijing will also focus on applications to join other large-scale trade agreements including the second-largest global trade pact, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. (CPTPP) and the Digital Economic Partnership Agreement (DEPA).
China’s strategy will be IIt’s consistent with how it works and other countries and political observers see the IPEF – a non-commercial and geopolitical deal rather than Biden’s return to Asia, Mr. Li added. Pacific.
At the end of May, following the launch of IPEF, former Malaysian Prime Minister Mahathir Mohamad criticizes Indo-Pacific agreementand consider this to be a political move by the US to isolate China.
Malaysia is one of 13 countries participating in the IPEF excluding China.
The RCEP is the only major regional trade agreement that China is a part of, and China will likely highlight it.
Heng Wang
Herbert Smith CIBEL Freehills Center
Trade expert Heng Wang, at the Herbert Smith Freehills China Center for International Economic and Economic Law (CIBEL) at the University of New South Wales, also makes the point that China will continue to use access rights. market they have under RCEP as they will allow to strengthen their presence in the region.
“RCEP is the only major regional trade agreement that China is a part of, and China will probably highlight it,” Wang said.
However, the threat of a competitive US trade deal remains real, said Henry Gao, an associate professor of law at Singapore Management University.
“In case anyone doubts the US vision of IPEF as the killer of RCEP, the White House has made it clear in [IPEF] Gao said: ‘Together, we represent 40% of world GDP.
“Why [use] this statement when the IPEF is not supposed to be about market access? “
Gao points to symmetry in the comments of RCEP members, particularly China, who have advertised that RCEP accounts for 30% of world GDP. “
China’s Big Plans for RCEP
Meanwhile, China has made great strides in implementing RCEP since its launch in January, according to Li.
It lays out a blueprint for Chinese businesses on how to expand trade and find opportunities through RCEP.
Beijing issued guidelines in six areas including trade and manufacturing, and promoted the use of the Chinese yuan to pay for commercial transactions. The authorities are also asking businesses to pursue the use of the publicized free trade port in Hainan, where an independent customs system is in place.
Li, who is monitoring China’s implementation of the RCEP, pointed out that at least 10 provinces, including Fujian and Zhejiang, have widely planned to use RCEP.
For example, Yunnan wants to increase exports of agricultural products, while Guangxi is looking to upgrade industrial divisions jointly operated by Malaysia.
The Guangxi and Fujian governments also want to build more industrial facilities in Vietnam, Malaysia and Indonesia.
Many provinces have committed to providing a range of RCEP-related support services in intellectual property rights protection and commercial dispute resolution mechanisms, Li said.
As for signing more trade agreements to potentially counter the IPEF, China is likely not going to apply other bilateral or tripartite treaties in the region, such as signing a free trade agreement. China-Japan-Korea stands out, Li said, citing China’s preference for “gradualism” or a slow, innovative approach to trade transactions.
