Should I stay or should I go?

Liasse de billetsThe role of the renminbi in trade partnerships in the Asia-Pacific region

Research article written by Phi Minh Hong and TRAN Thi Anh-Dao, affiliated researcher at Irasec, in Post-Communist Economies journal, Volume 32, 2020 - Issue 8.

The signing of the Regional Comprehensive Economic Partnership (RCEP) on 15 November 2020 by leaders of 15 Asia Pacific countries has created the largest regional free trade zone in the world. As part of the 37th ASEAN Summit chaired by Vietnam in Hanoi, this trade pact covers 1/3 of the global population, 30% of the World’s GDP and 14% of the World’s exports. While India had left the RCEP negotiations in 2019, this last free trade agreement (FTA) aptly illustrates alternatives options to bundle multiple and overlapping FTAs in Asia and the Pacific Rim. Regardless of the geographical configuration, the economic and trade negotiations to establish an FTA in the heart of the Asia-Pacific region are actually hiding a battle of power between China and the other giants for control of the region.

In light of this, Thi Anh-Dao Tran (Research Associate at IRASEC) has just published an article on the topic in Post-Communist Economies. The US and China are the two principal trading partners of most countries in Asia and the Pacific Rim. Rising trade tensions between the two key players, in addition to the country’s long term “Made in China 2025” strategy (import substitution and a shift away from cheap goods towards higher-value manufacturing), questions about the relevancy of the US President Donald Trump’s decision to withdraw from the Trans-Pacific Partnership (TPP) in January 2017. Using different types of dataset, the authors conducted a comparative analysis for China and the US in their bilateral trade with the members of RCEP and the former TPP.

Read the article.