Event Report: Japan and Asia in the pandemic era: RCEP
On February 12th, 2021, the Centre for the Study of Global Japan, in partnership with the Asia Pacific Foundation of Canada and UBC’s Centre for Japan Research, welcomed Wendy Cutler, Shihoko Goto, Michael Plummer, Jeff Reeves, Yves Tiberghien, and Deanna Horton (moderator), to present “Japan and Asia in the pandemic era: RCEP”.
The presentation examined the Regional Comprehensive Economic Partnership (RCEP), which was ratified in November 2020. The fifteen countries that signed RCEP included all of ASEAN plus Japan, China, South Korea, Australia, and New Zealand comprising about one third of the world’s population and global GDP. The distinguished panel discussed the global implications of the RCEP including its significance for Canada, the Biden Administration, and Japanese foreign policymaking.
Following opening remarks from Phillip Lipscy and Deanna Horton, the presentation began with panelist Michael Plummer who discussed the economic effects of RCEP. Plummer examined the broad economic implications of RCEP, which included its effects on the global economy, how it is being perceived by the U.S. and the European Union, and the consequences of India’s withdrawal from the agreement. Plummer noted the importance of increased engagement from the United States on the economic front in the Asia Pacific in the face of an increasingly assertive China.
Next, Shihoko Goto discussed the impacts of RCEP on the power structures of Asia and its global implications. The speaker noted that with the United States withdrawal from the Trans-Pacific Partnership (TPP) in 2017 and its absence from RCEP, there has been a shift in the power dynamics of the Indo-Pacific region. However, amid the optimism of reimagining the regional order without the United States, Goto warned that there are dark clouds looming ahead. She noted that the future of Indo-Pacific power dynamics will be subject to U.S. unpredictability and Japan’s developing leadership position.
Next, Wendy Cutler offered a view from Washington on the implications of RCEP and what it means for international relations. Cutler noted that although RCEP is basically a low standard agreement, it is nevertheless significant and meaningful. Most notably, ratification of RCEP demonstrates that countries in Asia are becoming more confident about negotiating agreements among themselves without the presence of the United States. In the final analysis, the speaker discussed the so-called winners and losers of the agreement. Among the 15 members of the agreement – all of which are winners – Japan has reaped particular benefits because of its newfound free trade agreements with China and Korea. Conversely, the losers of the agreement are India and the United States, which will not obtain the market access benefits.
Jeff Reeves discussed the global strategic significance of RCEP and considered the implications of the emerging idea of an “Indo-Pacific”. Although the concept of an “Indo-Pacific” has been prevalent in the contemporary strategic discourse around Asia, the concept itself is relatively new. Reeves noted two important implications of the concept of an “Indo-Pacific” in which he grounded his analysis of the global strategic significance of RCEP. First, operationally the Indo-Pacific describes a region stretching across the Pacific and the Indian Ocean areas including India and sometimes Africa and the Middle East into a greater Asian region. Second, normatively the Indo-Pacific relies on concepts like the free market and liberal rules-based order to describe its proponent states governance and economic policies. In concurrence with the other panelists, Reeves argued that RCEP is strategically significant because it provides further evidence that Asia is becoming increasingly regional and less dependent on external sources.
Finally, Yves Tiberghien considered the geo-economic implications of RCEP and detailed the findings of a survey he conducted on how RCEP was portrayed across the Indo-Pacific region. Tiberghien noted that in geo-economic terms, RCEP will have a significant ripple effect on regional supply chains because of its generous and flexible terms. For example, the terms of the agreement pertaining to the value-added content and tariff heading options are very flexible and subject to change in a way that provides a significant economic advantage to regional chains. Tiberghien pointed out a clear hope on the Japanese side that the RCEP would provide a further incentive for the U.S. to engage in Indo-Pacific trade relations.
The presentations concluded with a Q&A session moderated by Deanna Horton. During the session, the panelists addressed questions surrounding the impact of the first notable agreement among the top three economies in Northeast Asia, the prospect of countries turning to China as a principal trade partner instead of the United States, and predictions on how RCEP will evolve over time.
The Centre would like to thank Wendy Cutler, Shihoko Goto, Michael Plummer, Jeff Reeves, and Yves Tiberghien for delivering insightful presentations. We would also like to thank the virtual global audience in attendance for their engaged participation and fruitful questions.
