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GeoPod's Deep Dive into trade with ACITI's Dr Pru Gordon
This week on GeoPod, Tenjin Consulting's Alexander and Georgina Downer do a deep dive into trade with Dr Pru Gordon, Executive Director of the Australian Centre for International Trade and Investment. Pru has worked on trade policy for over 25 years, both in and out of government. So who better to discuss the recent signing of the Regional Comprehensive Economic Partnership (RCEP) agreement with that Pru?
On paper, RCEP is an exciting development for trade liberalisation when good news has been hard to come by in recent years. It's a 15 member deal (all ASEAN countries plus Australia, New Zealand, China, Japan and Korea), covering 30% of global GDP and 30% of the world's people. No US or India, though.
For Australia, the commercial outcomes of RCEP are limited. Services trade with ASEAN countries will improve, but beyond that the benefits are minimal. It's disappointing to see the low level of ambition in this agreement, compared to the CPTPP which was inked two years prior.
The geopolitics of RCEP are arguably more interesting than the trade outcomes. The lack of a US presence in this deal and the US withdrawal from the TPP mean the US role as the global standard setter of rules and driver of free trade is diminishing. The US is actively ceding space to others to set the agenda when it comes to trade, meaning the US role in the Indo-Pacific becomes skewed towards security. Former US President Barack Obama’s warning back in 2015 about the strategic importance of the TPP (“If we don’t write the rules, China will") seems prophetic.
It's unlikely that the US will join the CPTPP under a Biden Administration. The domestic politics are tough after Trump spent the last 5 years trashing the case for global trade agreements. Perhaps a re-branding will help, but either way, these days there is more space for China, Japan, ASEAN and others to set a more Asia-centric agenda with the US out of the picture.
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By Tenjin ConsultingThis week on GeoPod, Tenjin Consulting's Alexander and Georgina Downer do a deep dive into trade with Dr Pru Gordon, Executive Director of the Australian Centre for International Trade and Investment. Pru has worked on trade policy for over 25 years, both in and out of government. So who better to discuss the recent signing of the Regional Comprehensive Economic Partnership (RCEP) agreement with that Pru?
On paper, RCEP is an exciting development for trade liberalisation when good news has been hard to come by in recent years. It's a 15 member deal (all ASEAN countries plus Australia, New Zealand, China, Japan and Korea), covering 30% of global GDP and 30% of the world's people. No US or India, though.
For Australia, the commercial outcomes of RCEP are limited. Services trade with ASEAN countries will improve, but beyond that the benefits are minimal. It's disappointing to see the low level of ambition in this agreement, compared to the CPTPP which was inked two years prior.
The geopolitics of RCEP are arguably more interesting than the trade outcomes. The lack of a US presence in this deal and the US withdrawal from the TPP mean the US role as the global standard setter of rules and driver of free trade is diminishing. The US is actively ceding space to others to set the agenda when it comes to trade, meaning the US role in the Indo-Pacific becomes skewed towards security. Former US President Barack Obama’s warning back in 2015 about the strategic importance of the TPP (“If we don’t write the rules, China will") seems prophetic.
It's unlikely that the US will join the CPTPP under a Biden Administration. The domestic politics are tough after Trump spent the last 5 years trashing the case for global trade agreements. Perhaps a re-branding will help, but either way, these days there is more space for China, Japan, ASEAN and others to set a more Asia-centric agenda with the US out of the picture.