Opinion | RCEP is a good thing for global trade but will it stand the test of time? That’s doubtful
- The important issues of non-tariff barriers, unbalanced terms of trade and the increasingly digitalised and protectionist economic environment are not addressed
- In short, the RCEP exposes all the limitations of a traditional trade agreement
“We’ll see,” the Zen master kept saying in a revealing tale shared towards the end of the 2007 Cold War movie Charlie Wilson’s War. In the film, as Americans celebrated their victory over the Soviets in Afghanistan, a US intelligence officer soberly cautions against premature triumphalism by relating the reflections of a sage on the vicissitudes of life and, by extension, the transience of success in geopolitics.
Excluding America, the world’s largest economy, the mega deal is expected to cement China’s role as the economic engine of Asia, if not the world. One Western media outlet went so far as to describe the RCEP as nothing less than a “coup for China”.
The reality, however, is that the RCEP is more a reflection of the US’ declining influence than the supposed inevitability of China’s regional hegemony.
Ultimately, the RCEP is a trade-facilitation mechanism, which eschews more fundamental concerns such as new and evolving non-tariff barriers, suboptimal terms of trade for resource-exporting countries, and overall decline in the importance of physical trade in an increasingly digitalised and protectionist economic environment.
