An Evaluation on the Regional Comprehensive Economic Partnership Agreement

AN EVALUATION ON THE REGIONAL COMPREHENSIVE ECONOMIC PARTNERSHIP AGREEMENT The Regional Comprehensive Economic Partnership (RCEP) Agreement was signed at the 4th RCEP Summit held between members of the Association of Southeast Asian Nations (ASEAN) Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam and ASEAN’s dialogue partners Australia, China, Japan, South Korea and New Zealand on November 15th 2020. The RCEP Agreement, which was signed after about 8 years of negotiations, stands out as it is the world’s largest free trade agreement. First of all, the RCEP Agreement is one of the most important results of the economic integration process that is gaining importance in the Asia-Pacific region. Because the Asia-Pacific region with its trade-economic developments in the last 20-30 years has become one of the most important centers of gravity of the world economy today. Despite the global and regional geopolitical struggles and various disputes in the Asia Pacific region, whose political and economic activity rapidly increases in the international arena, the regional economic cooperation, trade and investment issues with economic regionalization and the integration process is accelerating. Therefore, with the rise of the Asia-Pacific region in terms of political and commercial-economic aspects, strengthening economic relations between the countries of the region, liberalization of trade and investment, facilitating commercial and technical cooperation and business contacts emerges as a serious need. From this point of view, the 15 countries that are parties to the RCEP Agreement correspond to almost 30% of the world population, more than half of the world economy and world trade volume, and the importance of the economic integration among themselves is an indisputable fact. From a geo-economic point of view, the foundation for such a trade agreement was laid long ago in the Asia-Pacific region. Prior to the agreement, there were several regional organizations in the region, such as ASEAN, ASEAN Plus Three and the AsiaPacific Economic Cooperation Organization (APEC). The priority targets of such organizations in the region are by strengthening the economic and commercial cooperation between the regional countries to ensure the stable growth of economies. Until today, ASEAN members have signed separate free trade agreements with Australia, China, South Korea, Japan and New Zealand under the ASEAN + One and ASEAN + Three platforms. Besides these, by signing bilateral free trade agreements between ChinaSingapore, Japan-Philippines, negotiations on free trade agreements between China-Ja-pan-South Korea triangle and China-Australia continue. This situation in the region has enabled the RCEP Agreement to emerge as a more comprehensive economic integration model. In terms of geopolitics, especially ASEAN countries attach more importance to the RCEP Agreement. This mentioned agreement appeared for the first time at the 18th ASEAN Economy and Trade Ministerial Summit held in Myanmar on February 26th 2011, and a decision was taken to initiate comprehensive negotiations on the RCEP Agreement at the 19th ASEAN Leaders Summit organized in Indonesia on November 14th -19th, 2011. Because, considering the economic situation in the region and ASEAN’s economic and commercial relations with other free trade partners, bringing the RCEP agreement to the agenda with the main objectives of ASEAN as following 3 headings:1) By developing the leading role of ASEAN in regional cooperation, in addition to the development of ASEAN, to enable it to play a more active role in regional and international affairs; 2) By expanding and improving such agreements with countries that ASEAN has free trade agreements like Australia, China, South Korea, Japan and New Zealand, enabling trade facilitation; 3) To further increase the economic cooperation between ASEAN countries through the agreement.

However, while evaluating the RCEP Agreement in the Asia Pacific region, geopolitical realities that may affect the economic integrations in the region should also be taken into account. When the RCEP Agreement was brought to the agenda, China considered it as an alternative to the Trans-Pacific Partnership agreement.

Therefore, the Chinese government has actively participated in the negotiations on the issue. China also needed to strengthen economic and trade relations with the countries that are parties to the RCEP Agreement in order to implement the One Belt One Road project, which has been on the agenda since 2013. For example, at the ASEAN-China Summit in 2013, the Chinese side called for the trade volume between ASEAN-China to reach 1 trillion dollars by 2020. In addition, the US-China trade war that emerged in March 2018 caused China to pay more attention to the issue. However, the fact that the USA, which has good trade-economic, political and military cooperation with other countries that are parties to the RCEP Agreement, except China, is not included in the trade agreement can be considered as a problem in itself. It is also remarkable that the signing of the agreement coincided with a period in which the global competition between the USA and China gradually increased and a US-led alliance against China began to form in the Indo-Pacific. The concept of Indo-Pacific, which started to be used officially in the strategic documents of the countries mentioned with the “Free and Open Indo-Pacific” initiative of the quadruple alliance known as the “Quad” between the USA, Australia, Japan and India, replaces the concept of Asia-Pacific in recent years. After the USA, Australia, Japan and India, France and Germany started to use the concept of Indo-Pacific in their new foreign policy strategies. It is obvious that the aim of preventing China’s increasing political and economic influence in the region by emphasizing India on the basis of the Indo-Pacific approach of these countries. It is also known that US President Joe Biden, who has given great importance to strengthening his country’s global leadership and strengthening its relations with its allies since coming to power in January 2021, considers the IndoPacific region as an important center of gravity of American foreign policy. Therefore Washington, by sending the US navy to the South China Sea, to point out that it will support Taiwan and other regional allies in any possible situation. It also shows that the US-China rivalry will gradually deepen in the region in the upcoming period. This situation has the potential to closely affect the future of the RCEP Agreement.

Furthermore, the issue of how to solve the problems such as the sovereignty debates on the South China Sea and Sankaku (Diaoyu) Islands, the China-India Border dispute, the Taiwan problem and the Korean Peninsula tension, which are among the biggest crises in the region, can directly affect the future of the relations between the parties to the RCEP Agreement, as well as the future of the agreement. Tensions are occasionally experienced between countries such as China, Taiwan, Malaysia, Brunei, the Philippines and Vietnam that claim the rights to ownership in the South China Sea, which covers a large area of approximately 3.5 million square kilometers. The fact that the South China Sea is in a very strategic position in terms of the global trade route is one of the reasons for the tensions in the region. Being highly dependent on the South China Sea in energy supply and trade goods transportation, forces these riparian countries to acquire important trade and energy routes in the region. In addition to all these, the political instability and uncertainty that emerged after the military coup in Myanmar in February 2021, which is a party to the RCEP Agreement, may negatively affect the expected ratification process of the RCEP Agreement.

Written by Omirbek Hanayi, Eurasian Research Institute, Kazakhstan Politics, Foreign Affairs, and Security       Armed forces of Tajikistan and Russia conducted large-scale joint military exercises involving over 50 thousand personnel, including nine thousand Tajik servicemen and over 2500 servicemen from Russia’s 201st military base in Tajikistan. The tactical exercise was held at Tajikistan’s Harb-Maidon, Momirak and Sambuli training ranges. According to the Head of the Defense Ministry of Tajikistan Sherali Mirzo, the exercise demonstrated high preparedness of the military forces, while Russia’s representatives called them important and timely (TASS, 25.04.2021). The President of Uzbekistan Shavkat Mirziyoyev awarded the Ambassador of Tajikistan Imomi Sodiq Ashurboyzoda, who is completing his diplomatic mission to Uzbekistan, with the Certificate of Honor of the Republic of Uzbekistan for his contribution to the high level of relations and development of multifaceted cooperation between the two countries. President Mirziyoyev noted the high level of friendship and strategic partnership between the two fraternal nations during recent years. Currently, the two governments are preparing a new agenda for full-scale cooperation that will be discussed during a high-level visit to Tajikistan to be made in the coming months (UzDaily, 24.04.2021). A wide range of bilateral cooperation issues between Kyrgyzstan and Iran were discussed during the meeting of the Deputy Minister of Foreign Affairs of Kyrgyzstan Aibek Artykbaev with the Ambassador of Iran to Kyrgyzstan Said Kharazi. The sides noted the importance of the activities of the joint Kyrgyz-Iranian intergovernmental commission in the system of bilateral relations. The sides also expressed interest in the restoration of transit and transport links during the post-pandemic period and the resumption of direct flights between the capitals of the two states in the near future (Kabar.kg, 23.04.2021).

The Central Asian Foreign Affairs Ministers and the US Secretary of State Antony Blinken took part in a regular meeting in the C5 + 1 format online. The participants exchanged views on the prospects for further strengthening economic cooperation, ensuring security in the region, combating climate change and promoting peace in Afghanistan. Particular attention was paid to the implementation of green energy technologies, digitalization of water management and the use of water-saving technologies (Centralasia.media, 24.04.2021). The President of Russia Vladimir Putin received his Belarusian counterpart Alexander Lukashenko in Moscow. According to the Press Secretary of Kremlin Dmitry Peskov, the leaders held a meeting behind closed doors discussing economic interaction between the two countries, mainly in the fields of industry, energy, medicine and high technologies. The sides also summed up the work that has been done over the past period at the government level through relevant ministries and departments (Rbc.ru, 22.04.2021) The Ambassador of Azerbaijan to Pakistan Ali Alizade met with Pakistani Navy Commander Admiral Muhammad Amjad Khan Niazi. While discussing the military cooperation between the two countries Ambassador Alizade noted that Azerbaijan was interested in cooperation with Pakistan in the military sphere. Admiral Muhammad Amjad Khan Niazi welcomed the idea of sharing experience and providing military-technical capabilities to Azerbaijan and reiterated his country's support for Azerbaijan's fair position regarding the Karabakh conflict (AzerNews, 20.04.2021).

Economy, Finance, and Energy       The Minister of Agriculture of Kazakhstan Saparkhan Omarov announced plans for the development of the country’s agro-industrial complex. The Ministry is currently preparing a new development strategy for 2021-2025, which aims to increase the household income of the rural population, build 70 thousand family enterprises and create seven ecosystems attracting 350 thousand farms. According to Omarov, 845 investment projects worth KZT 4.5 trillion ($10.4 billion) will be implemented during the next five years, of which 285 projects will be launched in 2021 (Kazinform, 20.04.2021).

Bilateral cooperation between France and Turkmenistan in the agricultural sector is deepening. During a webinar organized by the French MEDEF International and the diplomatic missions of the two countries, it was announced that French companies were ready to implement joint projects, especially in the development of greenhouses. Different ministries of Turkmenistan, as well as representatives of the Central Bank and business circles and 35 large French agricultural companies attended the webinar (Kabar, 22.04.2021).

Uzbekistan continues to attract foreign direct investments in its energy sector. Recently, the country’s Energy Ministry signed an investment agreement for the construction of a new thermal power plant and a power purchase agreement with the Dutch company Stone City Energy. In order to construct the 1560MW power plant, the company will invest $1.2 billion. The project will be finalized by the end of 2024. The plant will be equipped with the latest energy-saving technologies and will create 2000 jobs (UzReport, 21.04.2021). According to the State Customs Committee of Azerbaijan, during the three months of 2021, the country has had a foreign trade surplus of $1.6 billion. The country's trade turnover during the first quarter of 2021 equaled $6.6 billion. Azerbaijan’s exports reached $4.1 billion, while it imported goods worth $2.5 billion. Currently, Azerbaijan’s businesses have trade with partners in 153 countries. The EU remains a key export market for the country followed by its partners from the CIS (AzerNews, 19.04.2021).

The Central Bank of Russia continues to increase its key rate. Recently, the regulator raised it from 4.5% to 5%, which is the second change of the rate in 2021. The Bank of Russia explains its decision by following important reasons. Firstly, growth rates of consumer prices and inflation expectations of households and businesses are higher than expected. Secondly, aggregate demand is recovering fast and in certain sectors exceeds their output expansion capacity (TASS, 23.04.2021). Ukrainian Grain Association signed a memorandum on strategic cooperation with the working committee of China’s Association of Small and Medium-sized Enterprises. The President of the Association Mykola Gorbachev mentioned that Ukraine could increase grain exports to China by 2-3 times. The country’s current grain export to China is estimated at 10 million tons. The exports mainly consist of corn and barley. (Ukrinform, 20.04.2021).

Prepared by Zhengizkhan Zhanaltay and Kanat Makhanov Society and Culture       The Red Crescent of Turkey hosted a meeting with the participation of the Heads of the Red Crescent of Turkey, Azerbaijan, Kazakhstan, Kyrgyzstan and Uzbekistan. The participants discussed a wide range of issues such as activities implemented by the The Cooperation Council of Turkic-Speaking States (Turkic Council) Red Crescent Societies to counteract the COVID-19 pandemic, implementation of joint institutional capacity building programs, organization of consultations on potential partners and other topics. The Presidents of the Red Crescent agreed to organize studies regarding the implementation of the discussed projects and programs (Turkkon.org, 21.04.2021). Turkic Council and the State Agency for Public Service and Social Innovations under the President of Azerbaijan (ASAN Service) reached a preliminary agreement on expanding cooperation in various spheres. In particular, the parties agreed to exchange experience in rendering of public services and digitalization, as well as to cooperate in relevant spheres within the creation of a single digital platform. The ASAN service continues its cooperation in various fields with relevant structures of Turkey, Uzbekistan and Kazakhstan according to memorandums of understanding signed with them (Menafn.com, 20.04.2021).

Turkmenistan and Turkey held the 3rd online meeting of the specialized Turkmen-Turkish Council, which was attended by the Ministries of Education of Turkmenistan and Turkey - Orazgeldy Gurbanov and Ziya Selcuk. The parties focused on discussing bilateral cooperation in education, stressing the importance of the development of distance education. The Ministers also discussed the preparation process of the Memorandum of Understanding between countries (Centralasia.news, 21.04.2021). Kyrgyzstan received the delivery of the first 20 thousand doses of Russia’s Sputnik-V vaccine against the COVID-19. The ceremony for the transfer of the Russian Sputnik-V vaccine against the Novel Coronavirus infection was attended by the first Deputy Prime Minister of Kyrgyzstan Artyom Novikov. Within the framework of agreements reached during the visit of President Sadyr Japarov to Moscow, Kyrgyzstan is expected to receive a million doses of the Russian vaccine in the near future (Centralasia.news, 23.04.2021). The Ministry of Agriculture and Environmental Protection of Turkmenistan organized an online meeting titled "Multilateral Dialogue on the Development of Cooperation in the Aral Sea Region". The event focused on cooperation in preserving the environmental welfare of the Aral Sea region. Various representatives of international organizations, members of relevant Turkmen ministries, Mejlis deputies, experts from universities and public organizations attended the meeting. The participants discussed ways to address the issues of preserving the Aral Sea and improving the socio-economic situation in the region (Business.com.tm, 23.04.2021).

Turkish TV series are becoming increasingly popular in Pakistan. A popular Turkish TV series “Ertugrul” posted on the official YouTube channel of Pakistan’s state-run PTV has gained more than 100 million views. The series even became the most-searched item on Google's film-TV category search list in Pakistan in 2020. Due to such success, other Turkish TV series like “Yunus Emre: Askin Yolculugu” and “Kurulus Osman” also began to be aired by several Pakistani media outlets (Anadolu Agency, 24.04.2021).