A new trade deal could open up Southeast Asia to Chinese e-commerce, while also boosting Association of Southeast Asian Nations [ASEAN] as an alternative to Chinese processors.
The Regional Comprehensive Economic Partnership (RCEP), which was signed on 15 November, reduces barriers to trade between China and 15 Asian-Pacific countries. The partnership includes 10 Southeast Asian economies as well as Japan, South Korea, New Zealand, and Australia. It covers 2.1 billion people, with RCEP’s members accounting for around 30 percent of global GDP. Possibly the world’s biggest free-trading bloc, RCEP members account for almost a third of global economic activity.
The deal emerged out of the ashes of the failed Trans-Pacific Partnership Agreement, which was scrapped before it was agreed upon by then-newly elected U.S. President Donald Trump in 2016.
Signed at a time of increasing strategic competition between China and the United States, the deal is being hailed by official media in Beijing as a game-changer for Chinese trade. U.S. abandonment of the TPP, which had been drafted by the administration of Trump’s predecessor, U.S. President Barack Obama, effectively ceded the term-setting of the regional trade pact to China. The result is a deal that “will end the U.S. hegemony in the West Pacific,” noted a commentary in the traditionally nationalistic Chinese tabloid The Global Times.
The deal will increase opportunities for e-commerce business across the region, long an ambition of Chinese players like Alibaba. Japanese and South Korean investment into ASEAN members will continue to increase as the two countries seek to wean themselves off a politically sensitive dependence on Chinese manufacturing and processing sectors, according to Alicia Garcia Herrero, the chief Asia economist at the investment bank Natixis.
“China is not necessarily the biggest winner,” from RCEP, Herrero said.
It’s not clear how liberal the pact’s terms are, with retention of protection for agricultural products in some countries key to their signing up, according to Herrero. India’s reservations on that issue led to it withdrawing the RCEP negotiations in November 2019, though a territorial row with China also played a role.
Shanghai, China-based seafood marketing consultant Robin Wang sees RCEP as a plus for the Chinese seafood market, with more supply options opened up as a result.
“We expect more reprocessing in ASEAN countries, and afterward, those finished products will enter China for domestic consumption,” said Wang, the CEO of SMH International, which advises U.S. clients including Alaskan cod exporters.
Wang said the deal will benefit product headed into China from non-RECP members, who may choose to enter China via member-states in Southeast Asia.
“We look forward to more business opportunities for Alaska seafood,” he told SeafoodSource.
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