6 TPP and RCEP
Obama wanted TPP, a trade agreement (with less or eliminating tariffs and less regulations) with Asian countries excluding China. Besides eliminating tariffs, TPP includes human rights, protecting intelligent properties, environment and other ideas. The countries in South East Asia have a hard time to exclude trading with China. On the average, they have 20% of the trade with China. Most if not all of these countries do not want to upset U.S.
China is #1 trade partner with Australia. Australia’s prime minister is the stupidest (not a typo) politician. What do you gain by upsetting your #1 trader (China)? You lose important trade by being a running dog of U.S.
Trump did not want TPP, as it is better to deal with individual country to maximize our profits. We did this with Mexico and Canada. These two countries depend on us, and hence the deals are better to us. It is time- consuming to do a deal one by one with about 22 countries in Asia. China should thank Trump for withdrawing from TPP.
RCEP includes the ten S.E. countries plus China, Australia, New Zealand, Japan and Korea excluding U.S.A., which may join later on. India withdrew, as they would lose a lot. India’s protectionism makes most of their products not competitive in the world market.
RCEP is as important as EU in trade area. TPP is dead now and the new TPP if there is one will not be effective due to the RCEP and it may be forced to include China.
In any case, China gains a lot in the free trade with these countries. The trade blockage on China is not working especially with RCEP. Most likely, China will lead RCEP. So far, the U.S. is the loser. We have lost our concentration and effort with the new TPP due to spending too much time in reelection and fighting the pandemic. As usual, the media do not report RCEP and its importance.
RCEP is a new major free-trade zones after EU and NAFTA (U.S., Canada and Mexico). RCEP lacks of energy supplies.
Links
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