top of page

RCEP and Emerging Trends in the Indo-Pacific; By Dr R Srinivasan

Updated: Feb 21, 2023


Image Courtesy: Ambafrance

Article 64/2020

Australian Prime Minister Scott Morrison MP was awarded the Inaugural Hugo Grotius Prize in London on 23 November 2020. The Prize is instituted by Policy Exchange K in honor of the founding-philosopher of international law, Hugo Grotius. The award was in recognition of the Prime Minister’s work in support of the international rules-based order. In his keynote address, the Australian Prime Minister welcomed the “timely publication by Policy Exchange’s Indo-Pacific Commission, A Very British Tilt: Towards a new UK strategy in the Indo-Pacific Region”. On this Commission’s core proposal for Britain to increase the priority accorded toward the Indo-Pacific, Scott Morrison remarked: “I couldn’t agree more and have conveyed the same to Boris. I endorse the report’s vision for a reinvigorated community of free and independent nations with a single overriding goal. Namely, reinforce a sustainable rules-based order in the Indo-Pacific that is resilient but adaptable to the great power realities of the 21st century” (Policy Exchange UK, 2020).


Covering the Prize Ceremony, AFP reported the Prime Minister as having said, with reference to China: “Morrison warned this coercive diplomacy was just “a foretaste” of what other countries — including those in Europe — can expect to endure in future”. Further, the same report cited Morrison as having told the UK Policy Exchange that “Greater latitude will be required from the world’s largest powers to accommodate the individual interests of their partners and allies. We all need a bit more room to move,”  (AFP News, 2020).


Australia was perhaps the first country that called for international investigation into the spread of Corona virus from Wuhan. In the aftermath of protests by China to such a proposal (Guardian, 2020), relations between both the countries went below normal. Having been a steadfast ally of US in the Pacific Theatre, Australia’s actions and reactions were endorsed by US and UK in the trade war that ensued. In any case, led by US at the forefront, trade war on China intensified and the virulent spread of Corona aided the hardening perceptions.


While economies across the globe took a mammoth hit due to lockdown and colossal need for COVID19 containment efforts, China emerged the first nation to control and re-ignite its economic engine. Chinese registered a 4.9 percent growth in GDP (BBC, 2020) in the third quarter of this FY. In the same breath as having shown pandemic-resilient growth, China-backed RCEP shot into prominence on 13 November 2020. Comprised of 15 nations in the Asia-Pacific, most notably all of the ASEAN, RCEP makes up nearly a third of the world’s population and accounts for 29% of global gross domestic product.


The new free trade bloc will be bigger than both the US-Mexico-Canada Agreement and the European Union. The Peterson Institute for International Economics estimates the deal could increase global national income by $186bn annually by 2030 and add 0.2% to the economy of its member states (BBC, 2020). Amongst the most notable mid-to-big economies that have joined the RCEP are South Korea, Japan, New Zealand and Australia.


In the prevalent pandemic devastated global economic scenario, revival signs from China signal a ray of hope for many countries. With the lucrative tariff regimes announced by China as part of RCEP, member countries would be able to avail complementary treatment helping them to boost domestic economies as well as exports perceivably in a Rules-based-Environment. In Australia’s own assessment, the benefits of RCEP were summarized as (Govt of Australia, n.d):

  1. A single set of rules and procedures for Australian goods exporters to utilise RCEP’s preferential tariff outcomes across the region, and increased opportunities for Australian business to access regional value chains by allowing goods made in another RCEP party from Australian inputs to benefit from tariff preferences under RCEP when exported to a third RCEP party.

  2. Avenues for tackling non-tariff barriers, including in areas such as quarantine and technical standards, by promoting compliance with WTO rules and further improving cooperation and transparency. Rules on intellectual property and e-commerce will help create an enabling environment for business to trade digitally in the region and support consumer confidence in the online environment.

  3. New market access commitments for service suppliers and investors in China and ASEAN markets such as Malaysia, the Philippines and Thailand, and provide an additional avenue through which exporters can access those markets in which we already enjoy high quality FTA commitments, including Japan, New Zealand, Republic of Korea and Singapore.

In the backdrop of pandemic ravaged economies and the promises of RCEP, it would be interesting to re-read the Australian PMs remarks:

  1. I endorse the report’s vision for a reinvigorated community of free and independent nations with a single overriding goal. Namely, reinforce a sustainable rules-based order in the Indo-Pacific that is resilient but adaptable to the great power realities of the 21st century.

  2. Greater latitude will be required from the world’s largest powers to accommodate the individual interests of their partners and allies. We all need a bit more room to move.

Having re-read these statements, when we contemplate their meanings, two important thoughts for deliberation by International Relations scholarship emerge. They are:

  1. Rules-based order in the Indo-Pacific (for that matter elsewhere too) – The advantages stated by Australia for joining RCEP obviously entail freedom to trade through SCS with littorals/ASEAN, except that this time the trade would be under the benign approval of Chinese fleet prowling in those waters. It would also mean the complementary treatment to Chinese merchandise across the RCEP trade zone. The implications are clear – the very rational for FONOPS that US has mustered its resources in SCS would stand diluted. It also means that countries now not part of RCEP, like India, would be indirectly compelled join RCEP in order to enjoy unhindered, rather facilitated trade across SCS. Does this hollow out the debates till now held on Rules-Based Order in SCS by international community?

  2. Room for individual interests of partners and allies – The Cold War era of compulsions for alliance to ideological blocks is long passé. However, the Uni-Polar Order that America would have perhaps dominated has come under serious challenge by the rise of China. Discourses on these aspects are essentially in the domain of geopolitics. Geo-economics, in contrast, pertains to a nation’s aspiration for growth. Therefore pursuit of geo-economic interests should fit into the domain of national-interest-first. However, the means and methods of globalization prevent any one nation’s interest from prevailing over the other nation’s interest. Should that happen, again, the entire discourse on China’s debt-trap-diplomacy would be rendered hollow. Thus, the room for individual interests of partners and allies ends in a simple question – how much of room?

These questions call for reflections on the concept of National Interest, Objectives of Regional/Multilateral Cooperation and Ideology v. Development. Successful conclusion of RCEP deliberations spearheaded by China adds a new facet to the existing and expanding Chinese sphere of influence in Indo-Pacific and beyond. It calls for serious reflections on these conceptual dimensions to determine the paly of geopolitics in this region in times to come.

The purpose of this short piece is to provoke such reflections.


(Dr R Srinivasan is an independent researcher and the Managing Editor of Electronic Journal of Social and Strategic Studies (www.ejsss.net.in) He can be contacted at srinivasan.r961@gmail.com. The views expressed are personal.)

6 views0 comments

Comments


LATEST
bottom of page