Zidane Zeraoui Source: Courtesy
Fifteen countries signed last Sunday, November 15, the most ambitious trade agreement that confirms Chinese supremacy over the Asian Pacific. The Regional Comprehensive Economic Partnership (RCEP) integrates the 10 nations of the Association of Southeast Asian Nations or ASEAN (Indonesia, Thailand, Singapore, Malaysia, Philippines, Viernam, Burma, Cambodia, Laos and Brunei ) to China, Japan, South Korea, Australia and New Zealand.
The RCEP thus becomes the biggest trade deal in terms of Gross Domestic Product and is considered a Chinese victory over the ashes of the Trans-Pacific Partnership (TPP), which President Donald Trump buried in 2017 with his decision to withdraw the United States from the then the most ambitious economic project of the Barack Obama administration that sought to isolate Beijing in the largest ocean on the planet. However, with his “America first” policy, President Trump left the door open for China to dominate Asia and the Asia-Pacific.
Indeed, the TPP signed in February 2016, was left with 11 countries of which today 7 are members of the RCEP (Singapore, New Zealand, Australia, Malaysia, Brunei, Japan and Vietnam) leaving out the nations of the American continent (Peru , Chile, Mexico and Canada).
A geopolitical strategy
According to an expert from the National University of Singapore Business School, the RCEP is not just a trade project for China, but it “consolidates China’s broad regional geopolitical ambitions around the Silk Road initiative,” mega infrastructure generation program that connects the Asian power to the world, both by sea and by land transport.
With 30% of the planet’s Gross Domestic Product and a third of the world’s population, the RCEP exceeds the T-MEC and the European Union and took almost 10 years to materialize, but it was promoted when President Trump decided to withdraw the United States of the TPP. Its medium-term objective (20 years) is the elimination of tariffs on imports, but it also provides measures for intellectual property, telecommunications, financial services, electronic commerce and professional services.
The RCEP and Mexico
Bilateral trade between Mexico and Asia has grown continuously in recent decades, especially with China, Japan and South Korea. However, due to its locks, the RCEP could limit the growth of economic relations between Mexico and Asia-Pacific due to the priority that will be given to local economies and their competitive advantages when the elimination of tariff barriers is achieved.
The impact for the northern region of Mexico, closely linked to the North American economy, does not seem to be important, however, the Asian weight is felt in the production of motor vehicles (Kia in Cadereyta, Nuevo León), household appliances (LG in Monterrey ), etc.
To avoid their displacement from the largest market on the planet, Mexican and particularly northern companies should seek regional strategic alliances within the RCEP to take advantage of trade opportunities that will be generated, and thus be part of one of the regions with the most potential in the world.
The author is a Doctor of Political Science, specialist in international politics and regional affairs. Research professor at the School of Government and Social Sciences of the Tecnológico de Monterrey.
This is an opinion column. The expressions used here are the sole responsibility of the person signing them and do not necessarily reflect the editorial position of El Financiero.