The American Chamber of Commerce said on Monday it was concerned that the United States was lagging behind after 15 economies in the Asia-Pacific region on Sunday formed the world’s largest free trade bloc, cementing China’s dominant role in regional trade.
The Chamber welcomed the trade liberalization benefits of the new Regional Comprehensive Partnership Agreement (RCEP), saying that US exporters, workers and farmers need greater access to Asian markets. But she said Washington should not join the bloc.
RCEP covers 30% of the global economy and 30% of the world’s population, joining for the first time the Asian powers China, Japan and South Korea. In the coming years, it aims to gradually reduce customs duties in many areas.
The United States is absent from both the RCEP and the successor to the Trans-Pacific Partnership (TPP), leaving the world’s largest economy from two trade groups covering the world’s fastest-growing region.
Myron Brilliant, the chamber’s executive vice president, said the Trump administration has moved to counter unfair trade practices by China, but has only secured limited new opportunities for US exporters in other parts of Asia.
President Donald Trump withdrew in early 2017 from the Trans-Pacific Partnership Agreement, negotiated by his predecessor Barack Obama as part of the United States’ axis towards Asia. Brilliant said Trump has not entered into any comprehensive new trade deals in Asia since then.
“Given RCEP’s shortcomings, we do not recommend the United States to join,” Brilliant said, without going into details. “The United States, however, should adopt a more forward-looking strategic effort to maintain a robust American economic presence in the region.”
Brilliant noted that US exports to the Asia Pacific market have increased steadily in recent decades, but the market share of US companies has decreased.
He stressed the importance of the Asia-Pacific market, citing expectations that require an average growth rate of over 5% in 2021 and a rapid expansion of the middle class.