Research Back

The Regional Comprehensive Economic Partnership Agreement and Europe: Impact and Implications

Europe, European Union, RCEP, Trade, trade policy

The Regional Comprehensive Economic Partnership Agreement and Europe: Impact and Implications

 In the first 2 decades of the millennium, European Union (EU) trade policy underwent historic changes, amongst them an explicit pivot to Asia. Along with continued firm support of the rules-based World Trade Organization (WTO)-centred multilateral trading system, important new directions in the EU’s trade policy included a turn to competitive bilateralism, a strong focus on values, an ambition to protect and to promote European trade standards as well as the politicisation of trade policy. Asia’s outwards looking economic growth, the increasing trade interdependence in Asia as well as the various bilateral and multilateral trade agreements in the region, notably amongst them the Regional Comprehensive Economic Partnership (RCEP), attracted the EU’s attention, and have helped cause and drive these changes. There was no particular Asian influence on the EU’s own regionalisation, however. Meanwhile, trade and investment relations between Europe and Asia have intensified greatly over this period. But the EU has been slow and late to formulate a comprehensive strategy for the Indo-Pacific region. In spite of some notable successes, the EU’s trade policy remains fragmented with differentiated approaches for each trading partner. 

Opinions on the RCEP’s relevance and importance for Europe are divided. RCEP sceptics point to the overall shallow nature of the agreement. RCEP optimists emphasise the future potential of trade and investment integration within the newly established RCEP economic area and warn of the discriminatory effects for Europe’s economy and businesses. So, Europe’s business will have to invest in the new RCEP free trade zone to overcome trade diversion risks and to benefit from the RCEP market integration. More worrying from Europe’s perspective is RCEP’s potentially negative policy impacts: a relative loss in the EU’s trading power, the risk of Europe being sidelined in the make-up of future trade rules, and RCEP’s future impact on rules based multilateralism and the WTO. The EU has various trade policy options with regard to the Indo-Pacific trade area and RCEP in particular. The most promising options include the conclusion of free trade agreements with as many RCEP member countries as possible, with the Association of Southeast Asian Nations as a group (as a region-to-region agreement), with other trading partners (from the Indo-Pacific or from other world regions), or with the Comprehensive and Progressive Agreement for Transpacific Partnership area.

The Regional Comprehensive Economic Partnership Agreement and Europe: Impact and Implications

Date

29 August 2022

Category

Regulation and Governance , Trade

Author

Hanns Günther Hilpert

Share this article:

Related Articles

Heyday of Asian Regionalism? The Implications of the Regional Comprehensive Economic Partnership for the United States

Heyday of Asian Regionalism? The Implications of the Regional Comprehensive Economic Partnership for the United States

05 August 2022

United States, RCEP, Trade, Regulation and Governance, Asian Regionalism, TPP

This paper analyses the implications of the entry into force of the Regional Comprehensive Economic Partnership (RCEP) for the United States (US). Traditionally, trade policy …

Australia’s Interests in East Asia’s Regional Comprehensive Economic Partnership

Australia’s Interests in East Asia’s Regional Comprehensive Economic Partnership

05 August 2022

Australia, East Asia, RCEP, Trade, Regulation and Governance, Asian Economic Integration

The Regional Comprehensive Economic Partnership (RCEP) agreement was seen as important for Australia economically and politically from its inception. RCEP economies account for roughly two-thirds …

CHOOSE FILTER
Loading Loading