Regional Comprehensive Partnership - Association of South Eastern Nations - Case Study Example

Regional Trade Governance Name: Course: Instructor: Date: Regional comprehensive partnership (RCEP) is an Association of South Eastern Nations (ASEAN) centred proposal for a regional free trade area, which would initially include the ten ASEAN member states and those countries which have existing Free Trade Agreements (FTAs) with ASEAN; Australia, China, India, Japan, Republic of Korea and New Zealand [Wat14]. Its objective is to achieve a comprehensive high quality and mutually beneficial economic partnership agreement that covers trade, investment, economic and technical cooperation, intellectual property, competition and dispute settlement among others [McE12]. The negotiations are done by the member states so as to ensure the interests of each specific state are accommodated since it comprises of different states with their own policies which may not be contrary to those of others. Through the negotiations, member states agreed on elimination of tariffs and non-tariffs barriers on trade in goods among the member states and to eliminate restrictions and discriminatory measures towards trade in services among RCEP participating countries[Wat14]. Economic and technical cooperation negotiations will help in narrowing development gaps among the parties and thus maximizing the mutual benefits of the RCEP agreement[Cor16]. Through establishment of shared norms, members will tend to cooperate as opposed to rules set by only one state which may not be very friendly to another state. The negotiations by member states are vital for the continuity of the regional partnership. Also, terms of operation are negotiated to avoid conflicts which may arise among the participants[Col14]. All the parties’ interests have to be considered since some states are more powerful and may enforce terms that only favors them while other states may not be enjoying the benefits of the association thus creating division. The RCEP is driven by the member states’ desire to achieve maximum economic and political integration. The leaders of the ASEAN are less likely to engage in disputes and this promotes political stability in the region. The continued ties through interactions on economic matters enhances good relations and conflicts that may occur are solved during heads of state meetings. Removal of trade barriers by within the region has enabled member states to carry out their business activities freely and have access to a wide market coverage. Regional integration is also driven by crises by the region. When challenges faced are common, they can best be addressed when all the region comes up with a common strategy so as to avoid recurrence of the problem. This common strategy can only be formulated when the member have the same economic status there is no dependence on the in terms of implementing it. Due to this, RCEP brings together the states so as to empower the less developed in order to contribute to the betterment of the region and reduce the challenges facing them such as environmental pollution due to overpopulation and increased crime rate due to unemployment [Bre14]. The crises faced provide an avenue for the leaders to seek for solutions and among them is the formation of an association which will provide a channel for the members to examine and evaluate themselves on how to prevent and solve the emerging issues in their region. The ASEAN members need to exercise their freedom and avoid the external influence from the powerful nations such as the US. This led to formation of the association so as to combine their efforts and resources and have the bargaining power on the matters affecting their region. Formation of the RCEP was also driven by the existence of other regional associations such as the EU which was proving to be successful as its members were enjoying the benefits of free trade agreements (FTAs). This enticed the Asian states to have their own association[Kir15]. Regional security is another driver of to RCEP. Through improved security courtesy of ASEAN, member states are confident in carrying out their business activities in any part of the region since safety is guaranteed and risks of incurring losses due to instability are rare unlike the old regionalism where it was state centred. In the new regionalism, ideas pertaining matters are discussed by all the members and security affairs is are handled by all the states for the common good of the region. The created security system by the associated is supported collectively and instill confidence to members thus promote economic integration[Com15]. Cultural integration has led to success of the RCEP. In the new regionalism, it is pushed both state and non-state actors. This transformation has greatly influenced the partnership’s operation. New ideas and approaches are being incorporated for instance the use of natural or given regions which blocks other states from taking part is not used thus any other state can enter into agreement. This creates a larger market for business as more states can be involved [Mur14]. Investment is another driver of RCEP as it promotes economic growth in other member states that had no ability to conduct or start some business ventures on their own due to lack of technical or economic ability [Bre14]. Through the exploration of the new ventures, it enables maximum exploration of the untapped resources thus realizing the benefits of the integration through improved GDP of the host state and creation of new goods and services. Creation of job opportunities will also be brought by the economic integration. Through the RCEP, the economies of the member states is at a reasonable balance. Less developed states have been assisted by the developed and they now have a bargaining power on regional governance[Cor14]. The rising powers such as China, have been put on check through the negotiations and agreements governing the association. This has promoted regional unity as cold war rivalry has reduced.On the other hand, there is dominance of the weak states by the powerful. This is through possession of a larger market share in the region and internationally. This undermines mutualism in terms of the benefits of the association as the weak states’ goods are sold locally thus getting less foreign exchange [And14]. Decline of cold war has led to peaceful strategies of settling disputes. This is through negotiations and it has promoted peace and unity in the region. This is demonstrated by the settlement of the long lasting border disputes between China and India which was a major point of terrorism[Isl14]. The ownership of sophisticated weapons by the powerful states creates dependency by the less powerful as they rely on them for protection from external conflicts thus their freedom is compromised. This dependency can be associated with the existence of the association as if it were not there these stats would have struggled to acquire their own. Opening of China’s economy has created opportunities to its neighbours. Due to its large population, enoughlabour is supplied and most of its businesses are operated regionally. Despite the formation of RCEP and its benefits, all of its objectives may not be achieved due to the following; Global economic imbalances. Some states may be gifted with natural resources more than the others. This can be due to geographical location or other natural factors which may not be adjusted and thus cannot be addressed by the association[IMF15]. Regional and global environment is not stable. The region may be faced with natural calamities which may affect a member state. This calamity affects the GDP of the affected state thus influencing its exchange rate in the international market [Her13]. Border clashes between the states affects the coalition as each state is concerned with its own individual affairs. These conflicts between the member states interferes with the process of goal realization as it creates tension not conducive for business [UNC12]. Spread of environmental pollution is encouraged by removal by barriers to trade and regulations to investments in the region. Spread of industries contributes to pollution of environment when environment friendly energy sources are not used. This negative environmental impact is was found to be associated with RCEP after analysis by Global Trade Project (GTP) on the 16 member projects and the world [Aka16]. References Wat14: , (Watanabe, 2014), McE12: , (McEwen , 2012), Cor16: , (Cornia & Scognamillo, 2016), Col14: , (Collier & Hoeffer, 2014), Bre14: , (Brennan & Murray, 2014), Kir15: , (Kirchner, 2015), Com15: , (Committee for Development Policy and United Nations Department for Economic and Social Affairs, 2015), Mur14: , (Murray, 2014), Cor14: , (Cornia G. A., 2014), And14: , (Ando, 2014), Isl14: , (Islam, 2014), IMF15: , (IMF, 2015), Her13: , (Hertel, 2013), UNC12: , (UNCTAD, 2015), Aka16: , (Akahori, Sawauchi, & Yamamoto, 2016), Read More