Asia nations take major step forward
A comprehensive new trade agreement among the nations of East and Southeast Asia promises greatly to increase production in the vast region, and in consequence benefit the global economy in total. Participating nations signed the Regional Comprehensive Economic Partnership (RCEP) agreement on Nov. 15, at a virtual summit hosted by Vietnam.
The list of members alone is impressive: Australia, Brunei, Cambodia,
China, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, South Korea, Thailand and Vietnam. These nations account for just under one-third of the total population of the globe, and nearly one-third of the total gross product of the world’s economies.
Two aspects of the agreement are particularly noteworthy. First, rules of origin are greatly simplified and standardized. These are the regulations that determine the country of origin of a product.
Up until now, they varied widely among individual countries, imposing barriers to trade and hampering shipping and sales of products on a regional basis. In the future, there will be less obstruction of supply and distribution chains.
Second, this is the first comprehensive free trade agreement involving China, Japan and South Korea. All three nations historically have been at odds, and occasionally at war.
This comprehensive agreement builds on earlier, much more limited accords of the Association of Southeast Asian Nations (ASEAN). The larger concept was developed at the ASEAN summit held in Bali, Indonesia in 2011, and the first negotiations to realize the agreement were held in the 2012
ASEAN summit held in Cambodia.
The founding document of ASEAN was signed on Aug. 8, 1967 by the foreign ministers of Indonesia, Malaysia, the Philippines, Singapore and Thailand. This was during Vietnam War, and two years after the United States began comprehensive direct military involvement on the ground in South Vietnam, while significantly escalating air operations against North Vietnam, as well as generally within the region.
During the Eisenhower administration, Secretary of State John Foster Dulles spearheaded formation of the Southeast Asian Treaty Organization (SEATO) in 1954, consisting of Australia, France, Great Britain, New Zealand, Pakistan, the Philippines, Thailand and the U.S. This alliance, along with the Central Treaty Organization (CENTO) in the Middle East and South Asia, was to duplicate NATO’s role in the Atlantic theater and deter expansion of communist regimes.
Neither CENTO nor SEATO ever progressed beyond the formalities of treaties to become realities of practical regional cooperation, though Australia and New Zealand on a national basis did send small numbers of troops to aid the American effort in the Vietnam War. Meanwhile, during that war, nations even proximate to Vietnam found emerging economic incentives so great that ASEAN resulted.
Media and some governmental commentary has emphasized that RCEP is less ambitious than the sweeping, much publicized Trans-Pacific Partnership (TPP), signed by the United States in 2016 but then abandoned by the new Trump administration. Democratic Party presidential nominee Hillary Clinton also turned against the TPP. The United States is not party to the RCEP.
An earlier successful U.S.-led effort is Asia Pacific Economic Cooperation (APEC), conceived by Australia Prime Minister Bob Hawke. President George H.W. Bush embraced the effort, and APEC began in 1989. The U.S. remains an active partner.
The 2006 APEC summit in Vietnam is especially noteworthy. Vietnam’s leaders honored U.S. Defense Secretary Donald Rumsfeld.
RCEP could eventually restrain China’s sustained, sizable military buildup. The U.S. should work especially with close allies Japan and South Korea toward that goal.