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With its absence from one of the world’s largest trade agreement, the Regional Comprehensive Economic Partnership (RCEP), the United States may want to “keep some of the doors open” with the participating Asia-Pacific countries by negotiating bilateral deals with them, an economist from HSBC said.
The China-led trade pact is a geopolitical win for China in the region and stands as a dominant economic power in Southeast Asia at a time of uncertainty over Washington’s economic ties with the region especially after President Trump pulled the United States out of the Trans-Pacific Partnership (TPP), a broader agreement than the RCEP. It was widely seen as a Washington-led response to China’s growing sway in the Asia Pacific region.
According to some trade experts, this new trade agreement shows that the rest of the world will not wait around for the United States. The European Union has also pursued trade negotiations at an aggressive pace. As other countries sign new deals, American exporters may gradually lose ground.
What the US might do is strike more bilateral deals, bilateral agreements with individual RCEP members – not all of them but with some of them, just to keep some of the doors open,” Frederic Neumann, HSBC’s managing director and co-head of Asian economics research, told CNBC’s “Squawk Box Asia.”
The TPP, negotiated by the Obama administration, would have allowed the US greater engagement with the Asia Pacific region.
While the United States is currently focused on domestic concerns, including the need to fight the pandemic and rebuild its economy and infrastructure, has been noncommittal on whether he would join the TPP’s successor.
President-elect Biden has said that containing the coronavirus is one of his immediate priorities once he takes over the presidency.
