The regional comprehensive economic partnership: rationality and the power plays

Abstract

The Regional Comprehensive Economic Partnership (RCEP) is an omnibus of five FTA agreements. Since 2010 the trade protectionism has expanded in the world economy and subsequently prompted ASEAN to suggest the RCEP to its FTA partners. Besides being a single trade bloc, the RCEP prime objective is to facilitate a deeper economic integration. Even though RCEP supports economic development, like in any FTA agreements, there are members that will receive trade creation and others trade diversion for those members that are less competitive in the international commodity market. Although ASEAN was the main driver of RCEP, it was unable to lead the group. Since China actively engage with countries in Southeast Asia (SEA), becoming a global economic power and increasingly enhancing its position in world politics, it tacitly leads the group. The objectives of this paper are firstly to review the economic benefits of the RCEP across the board, and secondly to analyse the domination of China in the RCEP, besides discussing how the US and its allies are disrupting and confronting China’s influence in the SEA region. Based on a qualitative approach we show that the upsurge of China’s role in the region as well as in the world has reshaped regionalism. The growing Chinese influence in SEA has diluted the dominance of the USA and its allies in the region. The USA allies that were embedded in the RCEP might distorted the progress of RCEP. The formation of the RCEP has disrupted the US position in SEA.