In the post-Cold War Era, regionalism in Asia has gained momentum, albeit gradually. A defining feature of Asia’s economic and political landscape is multilateralism. It can be argued that Asian regionalism is not a result of political planning, but of economic interaction that has taken place over time. The economies of Asia have not only become wealthier but have also become closely integrated. In recent years, the overall regional growth with advancing technological trends and the rising economies, particularly of China and India, has further strengthened its positioning in the global economy.
On the other hand, regional adversity and rivalry also played a significant role. The security concerns act as primary driving factors for the actors to compete and cooperate in terms of maritime security conflicts. China’s naval modernization, economic growth, and territorial claims have raised flags in both international and regional communities. Thus, a functional transformation has occurred for the expansion of Asia-Pacific westwards to widen the range of security partners and to secure sea lines of communication (SLOCs) which serves as a critical connection between the countries of Asia and the Indian Ocean rim. This specificity appears significant in balancing maritime Asia due to the presence of diverging interests. An increased interdependence, specifically economic interdependence, results in inter-state cooperation, and the role of institutions gets defined as they make the call for collective actions with regards to common issues. Hence, economically interdependent states remain interested in cooperation due to the associated costs.
It can be argued that Asian regionalism is not a result of political planning, but of economic interaction that has taken place over time.
The Regional Comprehensive Economic Partnership (RCEP) can be understood from the standpoint of regionalism. It attempts to foster economic liberalization encompassing major Asian economies, i.e., the members of the Association of the Southeast Asian Nations (ASEAN), and the ‘Plus five’ members, namely, Australia, China, Japan, New Zealand, and South Korea. This economic architecture will cover an estimated 30% of the world’s population and 30% of global GDP. A market comprising of US$26.2 trillion will emerge that highlights the significance of the project. Originally, the agreement intended to bring the three biggest economies of Asia: China, India, and Japan, onto a common platform. The inclusion of these emerging power-hubs was an important aspect of the RCEP- trade deal. In the context of the heightened US-China trade dispute and the economic frailty within the European Union (EU), the RCEP signals and highlights Asia’s commitment to establishing an economic model that is multilateral and rule-based. Although Japan initially projected the idea, the ASEAN countries will have a central position in the emerging regional economic architecture. From ASEAN’s perspective, maintaining its centrality in RCEP holds significance in the ever-fluid and changing regional circumstances in East Asia.
It is pertinent to point out that RCEP is an attempt at region-wide economic integration, even though the members of the proposed project have bilateral free trade agreements (FTA) with each other. The notion rested on setting common rules with regards to the existing FTAs or economic partnership agreements (EPA). With the economic challenges that the international arena is witnessing in the face of the growing protectionist policies under Donald Trump, expanding state capitalism and the US-China trade war multiplies the importance of RCEP in retaining and fostering an economic order in Asia.
That RCEP is an attempt at region-wide economic integration, even though the members of the proposed project have bilateral free trade agreements (FTA) with each other.
As mentioned earlier, the growing American protectionist policies are fragmenting the liberal economic architecture. In such changing circumstances, Japan has strategically positioned itself within both Trans-Pacific Partnership (TPP) minus Washington, and the RCEP. Japan’s assertive role is driven by the concern that in the case it abstains from playing a constructive role in these regional trade projects, it will provide an easier path to China in fostering and establishing its primacy within these economic platforms. Both Japan and China, along with ASEAN have worked in shaping RCEP. Japan is seeking a path for projecting its readiness in leading multilateral trading systems, triggered specifically after it rescued TPP following the exit of the United States. This demonstrates Japan’s interest in promoting ASEAN+6 as an East Asian regional concept that is wide and expanded, despite the existing ASEAN+3 that is deemed to be a more appropriate regional institution by many regional nations, including China. Undoubtedly, Beijing’s growing influence both economically and politically is a cause of concern, and Japan has subsequently attempted to resist the influence by involving Australia and India; as they share a convergence of interests in counterbalancing China.
India was not willing to compromise the position of the US as its new trading partner and signing RCEP might have reduced the prospect of transforming its strategic ties with the US into ‘lasting economic ones’.
In this way, India’s regional presence was to be utilized by Japan at limiting China’s dominance in RCEP and by extension in maritime Asia. Hence, India’s strategic presence also aids Japan in positioning itself as a balancer. It will not be an exaggeration to state that regional powers are involving themselves in varying coalitions that challenge Beijing’s assertiveness and power projection in the region. However, India’s retrenchment from RCEP throws a spanner in the successful functioning of the deal. The refusal to join came due to the domestic outcry of the terms being unfavourable to India’s local market as it risked a substantial number of Chinese imports. In 2018, the trade deficit with China grew to $58 billion, and Indian policymakers feared an exponential jump in the trade deficit. Another less cited argument given to explain India’s withdrawal from the deal is its pro-American pivot in the hope of reaping economic dividends from its military-strategic alliance with the US. India was not willing to compromise the position of the US as its new trading partner and signing RCEP might have reduced the prospect of transforming its strategic ties with the US into ‘lasting economic ones’.
If seen geopolitically, India’s withdrawal from the deal came as a blow to Japan. As stated earlier, Japan sees RCEP be a provider of a significant leap towards a free and open economic system at one end, while guaranteeing its security with India’s presence acting as a checker concerning China’s rapidly growing influence on the other. As both Japan and India continue to pursue a robust strategy concerning a Free and Open Indo-Pacific Strategy (FOIP), India’s withdrawal diminishes its own ‘strategic weight’ and brings forth its flawed commitment to both multilateralism and the Indo-Pacific construct. In contrast, Japan remains committed to pursuing its strategy towards the FOIP, and India’s withdrawal established the perception that India will not be an easy strategic partner.
RCEP provides a framework of constituting all the regional stakeholders at one platform to institute a balance of power in the region that relies on inclusivity, stability, and economic convergences. Undoubtedly, the success of this regional framework will have a considerable impact due to its economic, political, and strategic dimensions. In multilateral arrangements, a deal that contains these three domains demonstrates its overarching capacity.