On November 15, 15 countries, led by China and Japan, signed the world's largest trade alliance, the RCEP.
Although currently comprising 15 countries, the trade alliance is said to be the largest in the world because its members account for about a third of the global economy, led by China and Japan. The Regional Comprehensive Economic Partnership includes China and Japan, as well as South Korea, Australia and New Zealand. Negotiations on the RSAP for the agreement began in 2012 and lasted eight years. The agreement was signed at a virtual meeting of ASEAN or the Association of South Asian Nations hosted by Vietnam.
The Association of Southeast Asian Nations (ASEAN) is already on the path to economic and political cooperation with Asia and the Pacific. It is also a key partner of the Shanghai Cooperation Organization (SCO). W
hat is special about the SCO is that besides China, it also includes Central Asian countries and Russia. It was formed in 2002, while ASEAN was formed in 1967.
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| The world's largest "trade alliance" |
hat is special about the SCO is that besides China, it also includes Central Asian countries and Russia. It was formed in 2002, while ASEAN was formed in 1967.
Thus, we see that in the last fifty years, the countries of Southeast Asia and Central Asia have gradually come closer to each other, but so far they have not been able to include the three largest economies in the world, namely the United States, India and Japan. Japan has taken a big step by joining the recent RSAP agreement, which will have a positive impact on the region and Asia as well as the world.
According to the RSAP agreement, taxes on the export of many goods will be abolished in the next 20 years, especially under this agreement, which will lead to major progress in the areas of all rights, telecommunications, financial services and electronic commerce. The question now is, what was the need for this new alliance if ASEAN and SCO or SCO existed even before this agreement? In fact, the previous two agreements were of a very limited nature and had considerable complexity. Under the previous agreements, there were significant problems in the supply chain of goods.
The world's largest trade alliance
For example, components used in a product may be taxed if they are imported from another country. For example, if a machine is being built in Vietnam and its parts come from Australia, they can be taxed under the ASEAN treaty, because Australia is not a member of ASEAN. But now, under RSAP, components or parts imported from any other RSAP member country to make any item or machine will be considered as equivalent, ie no tax will be levied. Now, the companies of the countries covered under the agreement will be from 15 member countries only. They will try to buy spare parts to avoid taxes, ie if they buy from the US from India, taxes will be levied.
That is why Japan has wisely joined the treaty without the United States, even though the United States has been responsible for Japan's military security since World War II, for which it pays a heavy price. Following the agreement, Japan and China will be able to reap trade benefits from a total of 15 countries in the region, which will benefit companies and economies in all 15 countries. We know that trade alliances are in fact effective at the diplomatic level as well, and that they help resolve political and military issues.
Therefore, it is a good omen that Australia, Japan and China will join this agreement, because Australia and Japan have long been very close to the United States and therefore far from China, because their ally the United States has traditionally been China. And there has been a hostile attitude towards Russia, especially during the last four years of Trump's presidency, when there have been regular attempts to encircle China, which has also affected Australia-Japan relations with China. Only Japan and China can reap the benefits. The United States could have shared in the benefits, but Trump did not. In 2017, the United States announced its withdrawal from the Asia-Pacific trade agreement.
Twelve countries were involved in the agreement, and former President Obama wanted to join the agreement so that the United States, like Japan and China, could play a role in the region and reap economic benefits, then obviously the region's political and military. It could also have helped reduce tensions. We see that in the last four or five years, Japan and China have shown more prudence than the United States and contributed to the development of a free economy by working with a broader vision. Yes, while the United States withdrew from its role under Trump's leadership, this is one of the main reasons for Trump's failure.
India also withdrew from negotiating the agreement with the United States because Indian Prime Minister Narendra Modi believed that US President Trump would benefit them more and help them become a major military power than China. And Modi's thinking has hurt both the United States and India. Modi should have learned from Pakistan's experiences. How could Modi do that when Pakistan could not fix its economy by serving America for a whole century. Now India, like the United States, is isolated and Japan and China will benefit. The new ECEP alliance has only 15 countries, but it is larger than any other major alliance in the world.
Other alliances include the United States, Canada and Mexico.
The ratification agreement and the EU treaty are included, but the RSEP member countries make up not only one-third of the world's population, ie more than two and a half billion people live in these fifteen countries and then their total production is approximately GDP. One third.
The significance of this new alliance is further enhanced by the fact that according to the International Monetary Fund's (IMF) global economic analysis, India's gross domestic product (GDP) is likely to decline sharply, while China and Japan are doing better. In an analysis released just last month, the IMF said the next two years could be a big surprise for the global economy, with indications of India's poor performance and China's improved growth.
Thus, according to estimates about Bangladesh, it will perform even better than India and its GDP growth is looking much better than countries in the region like India and Pakistan. According to the report, Bangladesh's gross domestic product (GDP) will grow by 4% this year, while India will see a 10% decline.
Where will Pakistan stand in this situation? According to the IMF estimates, Pakistan and Nepal will be at the bottom. Even countries like Bhutan, Sri Lanka and Maldives besides Bangladesh are performing better than Pakistan and Nepal. Now join the RCEP. How will China move forward? First of all, almost all world economies are in recession due to the corona virus, but Chinese trade is flourishing.
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| The world's largest "trade alliance" 2021 |
According to September data alone, exports to China increased by about 10 percent, while imports increased by more than 13 percent. In particular, after the arrival of Corona, China initially imposed a severe lockdown of three. The month endured a sharp slump, but its economy improved after July, which is now likely to improve further after joining the RSAP, while the United States and India will miss out. Japan, the United States and India can perform better and in this regard, RSAP Japan will also be helpful.
A major reason for the resumption of trade will be the growing international demand for home electronics and medical devices, etc., and China, along with Japan, also plays a major role in the manufacture and export of these devices and goods. Is likely to benefit the most from the RSAP. In August 2020, the Japanese economy experienced a sharp decline, largely due to a decline in exports, but is now expected to improve. ASEAN, the biggest trading partner of both Japan and China, has since been the United States and the European Union, but its role will become more important after the signing of the RCEP.
Here we need to talk about the role of Pakistan because we see that on the one hand Israel and the Arab countries are making significant changes in the economy of the region through agreements, on the other hand agreements like RSAP in Southeast Asia and the Far East. Bringing countries closer together while we have failed to build better relations with our neighbors in South Asia for our 70-year-old thinking, be it Afghanistan and Iran or India and Bangladesh or SAARC itself. Within SAARC trade relations, we have failed to change our thinking at all levels. In both the Middle East and the Far East, we are seeing that whether it is Israel and the UAE and Bahrain or Japan, China and Australia, all on their own. Moving forward with economic interests first improves trade relations which results in better political relations.
Take Israel, the UAE, and Bahrain, where barriers to trade are being removed through agreements, and the same is happening in the Far East thanks to RCEP. Now trade routes are getting smaller and wiser countries are playing their part to facilitate intercontinental trade. For example, Saudi Arabia has allowed Israel to use its airspace to help Israel reach South Asia and the Far East better and faster. Access is provided.
But we are not ready to open the ground routes from Central Asia to Southeast Asia in this region, chanting the traditional antagonism towards Israel and India. To pave the way for this, we have to pave the way, which will have huge economic benefits and ultimately help solve political and military problems. Trade between Israel and the UAE is expected to bring billions of dollars to both countries. And thousands of new jobs will be created, similar benefits are now ready for the RSAP countries to reap, but we are nowhere to be seen on this chessboard, neither in the Middle East, nor in the Far East, nor in South Asia itself. At the moment, we are only relying on CPEC, which is five years old, but our economy is sinking deeper into the abyss, which can only be remedied by broad trade agreements.
From Israel, the UAE and Bahrain to Australia, Japan and China, everyone has adopted a two-and-a-half approach, and we can take very little in the cycle of taking everything and changing our foreign policy and political and military priorities. Not ready, the way to change all this can come through trade, towards which General Pervez Musharraf had taken steps and also opened trade through Kashmir, but then extremists on both sides thwarted these efforts. And so on In this regard, it is important to remember that the signing of the RSAP includes all the ten ASEAN countries, ie no one tried to put cannabis in the ring.
From Brunei, Cambodia and Indonesia to Laos, Malaysia and Myanmar (Burma), ASEAN has unanimously welcomed five new non-ASEAN countries: Australia, China, Japan, South Korea and New Zealand, not Australia or Japan. Neither ASEAN nor the Philippines, a member of ASEAN, has tried to negotiate with China over maritime disputes. This shows that your political and military differences have their place, but when it comes to trade and economic interests. In that case, we have to leave everything behind. What if now RSAP and SAARC want to make such an agreement?
What is best for the region and for Asia as a whole is that the RSAP should form a broader trade and economic alliance, from SAARC to the SCO, from Japan and New Zealand to Russia, including Central Asia and Russia will join well, but the real problem will be with the SAARC countries, including India and Pakistan.
At present, these two countries are keeping their relations bad and on the one hand they are investing their own resources in arms and ammunition and on the other hand they are reluctant to provide basic facilities to their people. China is also hostile. He also questioned why China's railway project near Arunachal Pradesh was moving forward. China wants to complete its Sichuan-Tibet railway project soon, which is close to India's border with Arunachal Pradesh, but India is not happy about it. The 50 billion dollar project is a clear indication of China's economic strength. In comparison, India is far behind.
India is also trying to fix its infrastructure in the region. China is far ahead in this regard. India is worried that after the completion of this railway, China will be able to bring its large missiles up to India's rate and then it will not even need dual weapons. Instead of a BJP government in India, instead of China and India. Focus on improving relationships with SAP?
He is busy fanning the flames of Hindu nationalism in his own country. It has been observed that whenever governments fail economically, they try to divert the attention of the people by using religion. For example, in the recent elections in the important Indian state of Bihar, the BJP used the religion card and His coalition won a simple majority. In this way, the BJP has strengthened its position and pursued a policy of intimidating neighboring countries.
While we see countries like China and Vietnam that have fought wars in the past, especially the 1979 war that lasted a whole month. Despite this, they are forgetting the past and enhancing cooperation and friendly relations with each other. Similarly, Cambodia and Vietnam have been at war for almost ten years after 1978, but now they have all been forgotten. Thankfully, these are the attitudes that made ASEAN a success and now the RSAP's success. These attitudes will work. While signing the RSAP agreement, it was stated that its doors are open to other countries.
In fact, an attempt was made to include India in the eight-year talks, but it formally seceded in November 2019. Modi is said to have done so at the behest of US President Trump, who was against the RSP and wanted to suspend it. Now, in terms of population, China tops the list with a population of 1.4 billion. Indonesia is second and third with 270 million and Japan with 125 million, while the Philippines and Vietnam have a population of about 100 million.
China's gross domestic product (GDP) is three times that of China, followed by Australia and Indonesia, whose production is almost equal. They are second and third with 50,000 and 40,000 thousands respectively.
At the bottom are the poorest Myanmar and Cambodia with a per capita income of barely 1300 hundreds a year. This shows that even the richest and poorest countries can join the same treaty or alliance. This alliance will surely open new trade and economic avenues for the countries of Southeast Asia and the Far East, especially under the leadership of Japan and China, which will have a positive impact on the region as Japan, through its financial aid, China And they are already playing a positive role in road projects.
It remains to be seen how the SAARC countries will benefit from this, but it will require India and Pakistan to improve their relations. Change attitudes and leave the eternal enmity and work in a friendly manner.
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