TAIPEI (Taiwan News) — One of the challenges awaiting President-elect Joe Biden after his inauguration in January is whether or not the United States should join the Regional Comprehensive Economic Partnership (RCEP) — the world’s largest free trade area, which will be formed Sunday (Nov. 15).
Members will include the 10 ASEAN states, Japan, South Korea, Australia, New Zealand, and China. The U.S. and India opted not to join, though the trade zone will cover 2.2 billion people, or 30 percent of the world's population, and nearly 30 percent of its gross domestic product.
Following President Donald Trump’s decision in 2017 to withdraw from the Trans-Pacific Partnership (TPP), the formation of RCEP shows how the U.S. has lost power to influence regional economies to China’s benefit, academics and experts said.
By staying outside trade alliances, the U.S. has in effect left a vacuum to be filled by China, William Reinsch of the Center for Strategic and International Studies told the Bloomberg news service. With Washington absent, Beijing can expand its influence unhindered and tie more economies in the Asia Pacific closer to its own aims.
As a result, U.S. corporations will encounter more problems to sell their products and services in one of the most consumer-oriented and rapidly developing markets in the world, critics of the Trump Administration said. Syracuse University economist Mary Lovely said membership is a necessary move to provide access for U.S. companies.
The TPP, which has since transformed itself into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), might welcome the U.S. as a member in the future. However, sentiment against free trade could still be too high to allow the Biden Administration to make such a move within the near future.