To counter protectionist pressure from the United States, it is essential for numerous countries to establish multi-strata free trade zones.
Japan and 15 other East Asian countries have confirmed that they will seek to reach broad agreement by the end of the year on the Regional Comprehensive Economic Partnership (RCEP). The RCEP as well as the Trans-Pacific Partnership (TPP) free trade pact can help counter the U.S.
The RCEP is a large-scale economic partnership framework that includes China, India and other countries that are not parties to the TPP, and accounts for approximately 30 percent of the world's combined GDP -- more than twice the scale of the TPP from which the U.S. has withdrawn. If free trade zones that do not include the U.S. expand, it will be highly effective.
The U.S. administration of President Donald Trump has threatened its trade partners individually with high tariffs and has been trying to extract concessions advantageous to Washington. If Asian countries agree on trade liberalization, they can use it as the basis for rejecting the United States' unilateral demands.
Moreover, such an agreement could put the U.S. in a disadvantageous position in terms of exports to Asia, possibly prompting the U.S. business community to urge the Trump administration to reconsider its trade policy.
The government of Prime Minister Shinzo Abe has attached weight to the TPP out of fear that China could use the RCEP to increase its influence. However, both Japan and China now face the threat of a trade war instigated by Washington. Since the significance of the RCEP is increasing, Japan should do its utmost to form consensus on the partnership agreement at an early date.
However, it is no easy task to reach agreement on the RCEP. Negotiations on the partnership began five years ago, but countries involved have found common ground in only a limited number of areas, largely because differences persist in their respective economic development levels.
Japan and Australia have insisted on a high-level agreement on trade liberalization and rules on the protection of intellectual property rights. On the other hand, China and India have been cautious about rapid liberalization and setting strict rules.
It would be difficult to enforce a version of the RCEP as thorough as the TPP, under which the parties have agreed on high-level liberalization and strict rules. However, the RCEP's significance would dwindle if the parties settled for only a low-level trade pact. If a higher-level agreement were to be achieved, it would further activate trade in Asia as a whole, benefiting the countries concerned.
All the more for that, Japan, which participates in both the TPP and RCEP, should play an important role in pursuing high-level liberalization and rules in the RCEP.
Japan should try to make sure that achievements made in the TPP are reflected in the RCEP. To that end, Tokyo should convince Beijing of the importance of achieving high-level trade liberalization and creating stricter rules, and take the initiative in promoting free trade in Asia.