Asean free trade agreement: a wake-up call for Europe

Fifteen countries with a total of 2.2 billion people and one third of the world’s economic output: the new free trade agreement in Asia is tough. China in particular can massively expand its influence. What does this mean for Europe and the United States?

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A commercial agreement for 15 states With 2.2 billion people: China has one new economic pact For Asia and neighboring countries, there was joy in the region and mixed feelings in the rest of the world. To the Losers especially in the USA. The agreement is also one for Europe “Wake Up”says expert Lisandra Flach of the ifo Institute.

In a virtual summit of the community of Southeast Asian states Asean, the participants signed the certificate and held their signature in front of the webcam: with the one signed on November 15th “Regional Comprehensive Economic Partnership” (RCEP) and the the largest free trade area in the world originated. In addition to China, its members are Vietnam, Singapore, Indonesia, Malaysia, Thailand, the Philippines, Myanmar, Brunei, Laos and Cambodia, already united in the ASEAN Pact. In addition, the major economies of Japan, Australia, South Korea and New Zealand are involved, including China as a whole 15 states.

The 500-page contract governs relations with signatories Trade, services, investments, telecommunications is Copyright. That could be negotiated and signed to the end while the file World economy von Corona strongly braked and the United States ruled by Donald Trump Trade war lead against China, many observers see it as a great diplomatic success Chinese leadership – particularly important allies of the Americans with Japan and Australia China-Pakt to belong. On the one hand, the agreement acts on protectionist-nationalist tendencies à la “America first” on the other, it consolidates China’s role in the region.

1.4 billion Indians are not included

Small inconvenience for Beijing: India with its slightly smaller population 1.4 billion people had already abandoned accession negotiations in 2019. The country suffered a flood due to lower tariffs cheap Chinese goods feared – and therefore one damage its own economy.

The signatories of the pact, however, are hoping for one Opening of the Chinese market for their products. For non-alliance states, the Access to the medulla it will become heavier in the new free trade zone, says Clemens Fuest, president of the Munich Ifo Institute. Danger threatens “that European export products through the products of the new free trade area replaced“wanted.

At the request of our editorial staff, the economist Lisandra Flach of the same business institute also points out: Main beneficiary of the new agreement is China. Although the commercial contract could Economic performance of all participating countries, deepen relations between China, Japan and South Korea and overall “consolidate the Asian bloc” – all of them “Good news for the region “. But also the”Addiction of Asian countries involved in China “will increase, as China” clearly “leads the region. And not only that: strategically” the agreement will make it easier for China Rules and standards put “- the country can be like this influence concrete.

China dominates – and is “covered”

Other experts, however, argue that China had dominated trade in East Asia even before the deal. With the help of binding regulation for Rcep, now the People’s Republic will also be “closed”, said economics expert Hanns Günter Hilpert of the “Tagesschau”.

The new bloc is a commercial powerhouse if only because of its population: although there is no India, there are 2.2 billion people, or just under 29 percent of the world population, in the united countries, which – albeit only over the next twenty years – Duties within the contractual area dismantle is End trade restrictions want. Participating states generate 30% of global economic output and manage 28% of world trade. The Singapore Department of Commerce has announced at least the tariffs 92 percent of goods traded in the RCEP area must be disposed of, while they remain for all untreated states.

The problems could be for the German car industry arise: although manufacturers and suppliers from Japan and Korea have easier access to fast growing markets in Asia, this country’s producers may lag behind. Automotive expert Ferdinand Dudenhöfer already recommends in “Spiegel” that German manufacturers should further expand their locations in Asia and instead increase production in Germany to limit.

“The competitive pressure will increase”

This is why the popular scientist Flach sees the conclusion of the RCEP contract as a “wake-up call for Europe”: the EU should now “die Commercial negotiations with the United States revive and also with other countries Conclude trade deals. ”Candidates for negotiations on new deals could include India and the new US administration.

The importance of the Asian pact should also not overrated becomes: many trade barriers remain between participating States, especially in the agricultural and service sectors.

The agreement also has some gaps: Environmental legislation about is short in the document, even for Human and labor rights there was hardly any space. In these areas, the treaty clearly shows this Handwriting of China.

About the expert: Lisandra Flach is Professor of Economics at the University of Munich. He also heads the Center for Foreign Trade at the Ifo Institute in Munich.

Source used:

• Press release from the ifo Institute in Munich, 17 November 2020