As Beijing marauds forward with Xi Jinping’s plan for economic expansion, the onus is now on Joe Biden to decide where the United States stands.
In response to a question, during a media interaction, on the Regional Comprehensive Economic Partnership (RCEP) trade agreement (signed on Nov 15, 2020), US President-elect Joe Biden once again reiterated the point that Washington needed to work closely with other liberal democracies in order to enhance economic cooperation, with the objective of preventing Beijing from setting rules of the game. Said Biden while commenting on the need for US to work in tandem with other democratic countries: “We need to be aligned with the other democracies, another 25 percent or more, so that we can set the rules of the road instead of having China and others dictate outcomes because they are the only game in town.”
RCEP has brought together 15 countries, China, Japan, South Korea, Australia, New Zealand and 10 ASEAN member states (members of RCEP account for nearly 1/3rd of the world’s population and a whopping 29% of the global GDP). Symbolically, this agreement is being dubbed as an important achievement for China, at a time when there is political chaos in the US, and it has become more inward looking under Donald Trump.
Trump’s Withdrawal from TPP
It would be pertinent to point out, that one of Donald Trump’s first decisions was to pull the US out of the TPP (Trans Pacific Partnership). The TPP was a key component of Obama’s Pivot to Asia strategy to counter China’s growing economic sway over Asia. Significantly, a number of US allies, also part of the agreement, like Japan and Singapore, had expressed surprise with Trump’s decision to withdraw from the TPP.
Later on in 2018, Trump had said that he could reconsider joining the pact, if the US was offered a better deal. The TPP renamed CPTPP or TPP 11 consisting of 11 countries, Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam, entered into force in December 2018.
Progress of the CPTPP
The CPTPP has given a boost to imports of Vietnam to Japan, Canada and Australia. After Trump’s withdrawal of the US from the agreement in 2017, Japan has emerged as the most important player within the CPTPP, and has been seeking to bring new members on board. The UK has expressed its desire to join the CPTPP. Japan along with other members like Vietnam have expressed their support for bringing the UK on board the agreement. In a pre-recorded video message delivered at the APEC (Asia-Pacific Economic Cooperation) CEO Dialogues, Japanese Prime Minister Yoshihide Suga stated that Japan, which will be CPTPP Chair next year will seek to expand the grouping.
US Isolationism in South East and East Asia
While it would be fair that strategic ties between the US and ASEAN and Japan and South Korea have grown, with the Free and Open Indo-Pacific Strategy giving a fillip to the same. There have been hiccups as far as ties between Washington and Tokyo and Seoul are concerned (apart from trade issues, the Trump Administration has been seeking greater compensation from both for stationing of US forces) during the Trump Administration, in order to counter China.
Watch: Winners and Losers in the CPTPP Trade Deal
As far as economic issues are concerned, with Trump’s economic isolationism, such as withdrawal from the TPP, China has been a major beneficiary with Japan, South Korea and ASEAN being uncomfortable with the Trump Administration’s approach.
Democrats Opposition to TPP
Not just Trump, but even Democrats have opposed the TPP. It is unlikely that Biden would rejoin the TPP, given the current discourse and the fact that a large number of those who have voted for Democrats would be opposed to a trade agreement. In the past, Biden had suggested, that he would be open to joining the TPP but not in it’s present form. Here it would be important to add, that when asked recently about joining the RCEP, Biden made it clear that he could not comment, since he was not officially President.
Japan keen to get the US on board the CPTPP
While the US may not be in a position to join TPP, Japan is hopeful, that it would reconsider. Japanese Foreign Minister Toshimitsu Motegi said, “Japan thinks it is extremely important that countries like the United States join the TPP and further expand the momentum of free trade and make common rules fit for the 21st century,” Senior observers and policy makers are of the opinion, that the signing of the RCEP, and possible entry of the UK into CPTPP could pave the way for Washington joining the TPP.

China’s interest in the CPTPP Alliance
Interestingly, days after the signing of the RCEP, Chinese President Xi Jinping stated, that China was willing to join the CPTPP. Senior Officials from China’s Commerce Ministry have also indicated the country’s interest in joining the CPTPP. Japan too has given indicators that it is not averse to bringing China on board the CPTPP.
Watch: China keen on joining CPTPP
US Allies and Economic Relations with China
US isolationism, under Trump and inability to create any feasible alternative to China’s growing economic influence is not the only issue. A major challenge confronting Biden is that a number of liberal democracies, Germany, Australia and even UK have been seeking to re-assess their economic relationship with China, but their dependence on China has increased in recent years.
US isolationism, under Trump and inability to create any feasible alternative to China’s growing economic influence is not the only challenge confronting Biden.
There are domestic lobbies in these countries which have opposed taking an aggressive stance against China, because these would lead to deep economic impact. One such example is Australia where sections of the political class, the press as well as business houses have urged the government to exercise restraint vis-à-vis China. It is estimated that some of the actions taken by China have already impacted Australian exports to the tune of $19 Billion. So the question is, to what extent will such countries join an alliance of Democracies.
Biden’s Role in RCEP and TPP
While the idea of liberal democracies joining hands to counter, there needs to be a proper economic vision in place. In the past few years, as a result of Trump’s isolationism, China has sought to fill the vacuum created by the US. While the US has become more inward looking, Xi Jinping has repeatedly pitched for greater globalization, whether China truly believes in free trade or globalization is different but signaling is important. Undoing some of Trump’s economic policies, especially vis-à-vis US allies in Asia, will be essential for checking China’s increasing economic influence in the region. However, this may be not easy but not impossible. Apart from this, US has to make its presence felt by being a participant in the economic architecture of Asia.
