The Regional Comprehensive Economic Partnership (RCEP), signed on 15 November by China and 14 other states on the sidelines of the 37^th ASEAN Summit, was the second major Asia-Pacific trade deal to be inked in recent years. The RCEP follows the signing of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in 2018 by 11 countries, which went ahead despite Donald Trump withdrawing the US from the former Trans-Pacific Partnership (TPP) owing to his protectionist ‘‘America First’’ agenda.

At first glance, China looks to have stepped in to fill the void, seizing the opportunity to extend its influence and become a regional economic rule-setter. Upon signing the RCEP, Premier Li Keqiang said the deal was “a victory of multilateralism and free trade,” using language more often associated with the United States. Yet China will not be the sole beneficiary. Asia-Pacific countries hope the CPTPP and RCEP will encourage economic integration and drive growth as the region looks to recover from the impacts of the COVID-19 pandemic.

Dynamic Southeast Asian economies, four of which are members of both deals, are well-placed to benefit from the combined effects of CPTPP and RCEP in pushing down tariffs and liberalizing regional trade over the coming years. Aside from China, other stronger economies on the periphery, such as Japan, Australia and a small cohort of Latin American nations, are set for more marginal gains. The more difficult question is to what extent the United States, outside of both agreements as Biden takes office, is set to fall behind the curve.

CPTPP: US noticeably absent

The CPTPP, a successor to the scrapped TPP after Trump’s withdrawal in January 2017, was signed by the remaining 11 nations in Santiago, Chile, in March 2018. The agreement entered into force in December of that year, covering a market of almost 500 million people. The CPTPP is comprehensive in scope, with the main purpose being to slash tariffs and reduce other, non-tariff regulations, that serve as a block to free-flowing trade. The deal also enforces minimum labour and environmental standards across its members.

The economies inside the CPTPP—Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam—account for more than 13% of the global economy; had the US stayed on board, the deal would have represented 40%. In withdrawing, Trump argued that joining the TPP would have opened a door for American firms and manufacturing jobs to be lost to cheaper competition abroad. Trump has long expressed a preference for bilateral deals, where he argues the US has greater leverage.