O“Asean owes much of its stability to the principle of non-interference in members' internal affairs, and 'compartmentalizing,' so to speak, issues of mutual concern.

N Wednesday, we were honored to host China’s Ambassador to the Philippines Huang Xilian, the Federation of Filipino Chinese Chambers of Commerce and Industry president Dr. Henry Lim Bon Liong, and the Philippine Chamber of Commerce and Industry secretary-general Ruben Pascual for a forum on the Regional Comprehensive Economic Partnership, or RCEP. While the trade and economic benefits to the pact signed in November 2020 are clear, what is perhaps more intriguing is what impact the agreement could have on political relations throughout the region.

The RCEP is a far-reaching trade agreement first proposed in 2012 and largely driven by the 10-member Association of Southeast Asian Nations (Asean) countries. Besides Asean, the RCEP includes China, Japan, South Korea, Australia and New Zealand, and once ratified by all the signatories will be the world’s biggest trade agreement, accounting for about 30 percent of global gross domestic product (GDP). The RCEP countries will also collectively represent the world’s largest source of exports and the second largest import destination. The RCEP might have been even bigger had India not withdrawn from negotiations in 2019 or if the

US had not made the shortsighted choice to avoid participation in it; as it is, the RCEP will likely be large enough to dictate the direction of world trade for years to come.

Even though the negotiations for the RCEP took more than seven years, as large-scale trade agreements go, its creation was a relatively smooth process. This was due in part to the basis for forming the pact, which was to gather all the existing free trade agreements (FTAs) among the various parties into one comprehensive agreement that covered everything, something which The Economist has described as a “tidying-up exercise.”

However, the nature of the relationship among the Asean countries also played a big role. Asean owes much of its stability to the principle of non-interference in members’ internal affairs, and “compartmentalizing,” so to speak, issues of mutual concern. That character allowed a great many potentially thorny matters among the parties of the RCEP to be set aside and not muddy the context of the agreement.

That means the RCEP could very well serve as a tool to help resolve many of those longstanding disputes because assuming it will be ratified — and there is no reason think that it would not be at this point — the RCEP members will be returning their attention to these matters in the context of a deeper level of cooperation.

Some of the points of contention that the RCEP could indirectly help to resolve include the conflicting territorial claims in the South China Sea and East China Sea; disputes over the sharing of water resources in the Mekong River basin; China’s frustration with other countries’ unwillingness to cooperate with its efforts to police its own citizens’ gambling habits; and perhaps even the difficult situation in Myanmar.

To be sure, none of these or any geopolitical dispute is addressed by the RCEP nor does the voluminous agreement contain any provisions for linking political issues to trade. That, in fact, was the original reason for the US staying away from it; a majority of the other parties to the pact were unwilling to accede to American wishes to include conditions in which access to other benefits of the agreement would be tied to compliance with specific labor or environmental standards. The RCEP signatories instead took the view that while those were of course important, the trade agreement was not the most effective mechanism to deal with them.

Be that as it may, in practice it might be difficult and may not even be desirable to the countries involved to completely separate geopolitical matters from the trade relationship. After all, economic influence is the most irresistible kind of influence. The creation of the RCEP automatically created not only the biggest market for everyone who is a part of the agreement, but one in which competitive advantages are significantly reduced. Understanding this reality created by the RCEP could encourage countries to work harder to find resolutions to their various disagreements. If it does, then the RCEP will be even more valuable.