Economic integration

Economic integration — a foreign policy tool

East Asia is an economically integrated region. The Association of Southeast Asian Nations (ASEAN), Asia-Pacific Economic Cooperation (APEC) and Regional Comprehensive Economic Partnership (RCEP), which is expected to come into force in January 2022, reflect economic integration of the region. The collective momentum of the countries of the region towards economic growth has contributed to the cohesion of the region. Economic integration acted as a balance against competing political trends on the regional front. The inclination of the countries of the region towards economic integration underlines the importance of economic security. It also shows that a strong economy is the foundation on which the political castle is built. Economic agreements are platforms where states formulate the rules best suited to their well-being and to the region as a whole. With economic growth, the political weight of states also increases.

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a new initiative. CPTPP member states are Japan, Singapore, Malaysia, Brunei Darussalam, Vietnam, Australia, New Zealand, Canada, Chile, Mexico and Peru. These countries were originally part of the late Trans-Pacific Partnership (TPP) agreement. The TPP was the economic arm of America’s pivot to Asia. Former US President Barack Obama said “the United States, not China, should write the regional trade rules.” However, in 2017, the Trump administration withdrew from the TPP. The development of the CPTPP shows that the countries of the region, despite the American withdrawal from the TPP, have pursued the idea of ​​economic integration. The CPTPP can be described as a significant model of trade integration with members from the region and beyond. The transregional nature of the CPTPP is an attraction for other economic players. Engagement with the CPTPP is a license to cross the Indo-Pacific. For example, the likely inclusion of the EU in the CPTPP will provide the former with a commercial platform to enter the Indo-Pacific alongside economic gains. The EU maintains trade relations with Japan (Japan-EU FTA) and Australia; the two countries in the region would support a like-minded actor in the CPTPP.

The concept of economic integration and trade liberalization has led to regionalism and economic growth. However, critics of plurilateral preferential trade see economic groupings as a Western political response to “the rise of the remnant,” especially China. Edward Luttwak, an early conceptualizer of the idea of ​​geo-economics, opines: “Countries whose economies are threatened by China’s policies – policies that seek to make Chinese industries more competitive scale – should unite to contain China geo-economically”. China applied to join the economic grouping despite the CPTPP’s political lineage with the US-led TPP. Premier Li Keqiang said China wants to “strengthen trade cooperation through free trade agreements”. Cao Xin, Secretary General of the Charhar Institute (an international think tank in Beijing), writes in one of his articles: “China knows that the development of economic and trade relations with other countries in the world is the most effective way to respond to the China containment policy pursued by the United States and its allies. The members of the CPTPP, the countries of the region, maintain trade relations with China and are also members of the RCEP.

In today’s world, the strategic approach to strengthening bilateral engagements, being a trans-regional player and expanding the geopolitical horizon does not depend entirely on military capability. Rather than emerging strong on the political front and countering the weight of the adversary, economic diplomacy backed by economic prowess is essential. Economic organizations and economic corridors have become essential to a state’s foreign policy. Economic muscle also weighs the region’s political prospects. Submarines can send dissuasive signals to the adversary, but to counter the challenger and prevent expansionism, the economic encounter is a much more powerful force. The US House of Congresses of Singapore, Malaysia, Vietnam and New Zealand have urged the Biden administration to join the CPTPP.

Published in The Express Tribune, November 25and, 2021.

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