China is in the process of restricting the personal freedom of Hong Kong in what would normally be a dangerous economic move, but it’s getting cover on the move by many of its most prominent critics on Hong Kong policy with the signing of a massive free trade agreement. Scheduled for Sunday, the China-led Regional Comprehensive Economic Partnership will include fifteen nations, including South Korea and Japan – both strong critics of the Hong Kong crackdown – and Australia, which is in the middle of a diplomatic crisis with China.
RCEP will slash tariffs on goods between the fifteen nations, creating the largest free trade area in the world. It is not as comprehensive as the CPTPP or Comprehensive and Progressive Agreement for Trans-Pacific Partnership which was signed into law after the United States withdrew from the original Trans-Pacific Partnership, but some prominent countries are signatories to both: Japan and Australia.
The signing of the trade deal will entrench existing economic ties between China and the other members, which in turn will give the countries further diplomatic leverage against each other. It is precisely that sort of leverage which fueled Trump’s promise – one of the handful kept – to pull out of the Trans-Pacific Partnership.
The results are believed to have been destructive. Even without the tariffs put into place, the loss of market share in Asia is likely to have reduced international demand for American goods and thus negatively impacted American producers. The reason for the uncertainty is the multiple factors involved; not only has CPTPP come into play but tariffs have been enacted and, for much of 2000, COVID-19 has ravaged international trade. It’s impossible to pin down a precise cause because of that, but the reduction in trade numbers (for example, our monthly trade with one of our strongest international allies, Japan) are firmly established. Arguing that one bad policy (reduction in free trade, broadly targeted tariffs, failure to address COVID-19) is not especially destructive only heightens the devastation of the other choices… and trade was already diminishing before COVID-19 struck.
This is all independent of the successful development of the Belt & Road policy which has been directly facilitated by Trump’s tariffs, which undermines US trade influence throughout the world.
The administration of Donald Trump has utterly failed the United States citizenry on trade. his pronouncements of expected great wins against China have failed to come to fruition, with his only success in that arena being a successful attempt to shoot ourselves in the foot. And because economic ties grant strength to diplomatic actions, our failure has undermined what halfhearted efforts we have produced under Trump to further the notions of freedom and international human rights.
