RCEP

FIRST PERSON - Alex Magno (The Philippine Star) - November 24, 2020 - 12:00am

While we were busy coping with the floods, a truly historic event happened: 15 countries signed up for the Regional Comprehensive Economic Partnership (RCEP). The world’s largest trading bloc was born. It will reshape the way our economies grow post-pandemic.

The 15 countries encompass roughly a third of the world’s population and a third of the global economy. These countries include the ASEAN 10, China, Japan, South Korea, Australia and New Zealand.

The members of this trading bloc will now move to harmonize tariff policies and rules of origin. That will clear away much of the paperwork that impeded trading in the region.

The impact of this new trading bloc might have been greater had India not dropped out of the negotiations last year. The agreement signed last week, however, leaves a door for the world’s second most populous country to join at a later date.

It took all of 8 years and 31 rounds of negotiations before the 15 nations arrived at an agreement. All the work was worth it. The signing was timely, as the member-nations all struggle to climb out of the cratered global economy.

A study done two years ago by a major multilateral institution estimated that with the removal of barriers to trade and investment, the regional GDP could be boosted by 15 percent. This is exactly what our recession-hit economies need at this time.

More than merely enhancing trade of finished goods, RCEP will reshape the supply chains and bring about more integrated production across this vast region. It has been said that this is to be the Asian Century. RCEP is the instrument to make that a reality.

With the free trade framework, we could foresee large movements of investments to build more robust supply chains. The free trade area also becomes a large market that will support the region’s industries. We could likewise see more mergers among regional corporations to achieve more effective economies of scale.

After the US abandoned its Trans-Pacific Partnership project, the field was left open for RCEP to fill the void – except that this new trading bloc excludes the US. In a spectacular case of economic pragmatism overcoming political hang ups, the new bloc brings together rival nations and eases over many areas of tension.

Analysts concede that China emerges the biggest winner with the formation of RCEP. If the US and the EU continue with their effort to curtail China’s economic clout, the new trading bloc amplifies her economic power.

The old powers will now find it doubly more difficult to isolate the Asian superpower. China will thrive within the framework of this large trading bloc. It is the bloc’s preeminent member.

Over the next few years, RCEP will likely progress into unifying product and services standards as well as harmonizing technological protocols (such as in 5G and 6G). That will provide this bloc great leverage over the other competing economic regions.

Embarrassment

While leaders of the G-20 – the 20 wealthiest nations of the world – were conducting an on-line summit, Donald Trump stepped out of the White House to play golf. We are all used to this man’s rudeness and petulance. But he always manages to outdo himself.

Since elections were held earlier this month, Trump has spewed all sorts of conspiracy theories about his vote being stolen. All the while he was bunkered in the White House, refusing to address his people’s anxieties about spiking coronavirus infections threatening to decimate the population.

The Trump campaign filed 30 cases seeking to invalidate the results or cancel the votes of millions of Americans. He has lost all those cases – often with otherwise conservative judges mocking the fact that they were even filed without the benefit of any evidence.

By consensus, Trump’s legal strategy to block the certification of his successor has all but evaporated. His Plan B is to force Republicans in state electoral boards to refuse certification. This is a blatant political attempt to overpower the will of the electorate. It should soon fail.

There is no conceivable Plan C for Trump. At some point, the egocentric president will have to embrace the fact that he lost an election. He is a loser. The voters want him out. On Jan. 20, he either walks out of office by his own will or be carried out by sheriffs.

In the meantime, in his absurd state of denial, Trump is pushing divisions deeper, undermining both the legitimacy of the vote and the legitimacy of his successor. He fired his own election security official for declaring the last exercise to be the best it has ever been. He is not cooperating in ensuring a transition process works smoothly. He is pursuing a scorched earth strategy that will bring lasting damage to American institutions.

President-elect Joe Biden, in his usual restrained manner, described Trump’s efforts to undermine the election results “irresponsible.” Trump’s close ally Chris Christie was more direct, describing the futile legal effort a “national embarrassment.”

But Donald Trump was a national embarrassment from the start. Uncouth, unlettered, uninformed and unbridled, he wreaked havoc on America’s international partnerships, domestic policies and his own people’s sense of history. He chose myth over science, falsehood over truth. His incompetence caused the pandemic to run rampant, killing hundreds of thousands of Americans.

In less than two months, he leaves an office he desecrated. The world will be relieved that an adult will again occupy the Oval Office and bring a lot more sanity to the way this superpower is governed.

RCEP
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