Trade blocks: China vs. USA: Thoughts Following the Execution of RCEP
By: International Attorney, Amit Ben-Yehoshua.
The trade war with China was one of the key strategic building blocks of the Trump administration with the goal to "Keep America Great Again" by reviving America's days as the leader of the global economy. Those days were the days of battle of tariffs, sanctions and tit for tat, which were somehow resolved by the "Phase One" trade deal signed between China (abrupted by Covid-19.) Trump believed that America will benefit from bilateral trade agreements, where the US can assert its global power and abstained from multilateral agreements, which required the US had to negotiate with multiple countries.
While the US was working on bilateral agreements, President Xi of China was strategically working on multilateral agreements, working in big numbers and connecting between his Asian partners, or in Chinese terms: rejuvenating the Chinese nation and pursing the Chinese Dream of putting China back to the central global stage.
In today's economy, the global struggle is based creation of partnerships and strategic alliances – diplomacy of trade blocks. During the Obama administration, America invested its influence and prestige in the negotiation of the Trans Pacific Partnership (TPP) which was supposed to be a strategic trade pact connecting America with twelve key economies and successfully excluding America's biggest trade rival- China. The proposed agreement was signed by President Obama in February 2016, but shortly after the taking office in 2017, President Trump withdrew from the TPP to the great satisfaction of Xi's administration.
Regrettably, although during the Trump Administration, the world had benefited from the signature of the Abraham Accords (normalization of the relationship between Israel the United Emirates and Bahrain), in the global trade arena, the US missed out on taking a central role, by backing out from the TPP and the Paris Agreement (regarding climate change). While the US exited from the strategic alliances, China, moved forward, and expanded its global outreach creating the largest free trade agreement in global history – the RCEP (Regional Comprehensive Economic Partnership.)
The RCEP was signed by fifteen countries home to more than 2.2 billion people, which make up nearly third of the world's population and account for almost thirty percent of the global gross domestic product. In essence, the RCEP, orchestrated by China, is the world's largest trade bloc . The RCEP is an integral part of China's global leadership strategy, as evidenced by China's infrastructure alliance – One Belt one Road and China's monetary arm the Asian Infrastructure Investment Bank.
Interestingly, One of great challenges of President Elect Bidden is to Make America Great Again, as a leader in the global economy, as a nation that is able to connect and foster partnerships, and as the leader of the free world.
* International attorney Amit Ben-Yehoshua is licensed to practice law in Israel and California and served as the vice chair of the China Committee of the American Bar Association, and as the co-founder of the Israeli Chamber of Commerce in China. Amit can be reached at email@example.com & www.amit-law.com.