RCEP: An Economic Architecture for the Indo-Pacific?
By Hugo Seymour and Dr Jeffrey Wilson
The Indo-Pacific is an idea whose time has come. Recognising that the centre of gravity in Asia is shifting south and west, many governments have adopted the Indo-Pacific as a spatially-expanded conceptualisation of who and what constitutes the Asian region. The concept has a clear security logic: reflecting the strategic importance of sea lines of communication linking the Indian and Pacific oceans, and India’s demonstrable importance as a regional security actor. However, the economic case for the Indo-Pacific is less developed.
The Regional Comprehensive Economic Partnership (RCEP) promises to change this. RCEP is one of several “mega-regional” free-trade agreements (FTAs) launched in recent years. It seeks to create a sixteen-member trade architecture, comprising the Association of Southeast Asian Nations (ASEAN) and the six countries with which it has a plus-one FTA: Australia, China, India, Japan, Korea, and New Zealand. RCEP is systemically significant for the global trading system, accounting for almost half of the world’s population, over 30 percent of global GDP, and over a quarter of global exports. In GDP and population terms, a concluded RCEP will constitute the world’s largest trading bloc (Table 2). Significantly, by including India, it is the first regional economic institution to have an Indo-Pacific geographic scope.
Featured in the Observer Research Foundation’s prelude publication to its flagship strategic conference the Raisina Dialogue, this essay by Hugo Seymour and Dr Jeffrey Wilson advances the proposed Regional Comprehensive Economic Partnership as an institution that affirms the Indo-Pacific construct, alleviates the ‘noodle bowl’ problem of regional trade agreements, and acts as an effective model that suits the needs of Asian developing economies.