Understanding RCEP: Formation and Drivers Explained - Free Paper Sample

Introduction

August 2019 was the seventeenth anniversary of the Association of Southeastern Asian Nations, and the association celebrated its achievement through its two main goals. The ASEAN goals include establishing free trade agreements and maintaining peace among its ten countries (Driver, 2018). The regional organization has experienced everchanging needs as it comprises a collection of states with different objectives, values, and cultural activities. The states seek a greater unification through a more cohesive union, instead of separate nations, which maintains sovereignty and reduces the risk of conflicts between such states by following the strict rules of anti-interventionism (Driver, 2018). The paper discusses the emergence of the Regional Comprehensive Economic Partnership with specific discussion on how theories such as liberal intergovernmentalism, historical institutionalism, constructivism, and realist political economy explain the emergence of the bloc.

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Overview of Regional Comprehensive Economic Partnership

Regional Comprehensive Economic Partnership is a free trade agreement between the Association of Southeast Asian Nations members and some of its free trade agreement partners. The partnership was signed in 2019 eight years after its introduction in November 2011 during the 19th summit of ASEAN, and the negotiation about the agreement kicked off in November 2012 at the 21st summit of ASEAN (Wu, 2020). The partnership's main objective is to create an integrated market for the exchange of goods and services in the region through the eradication or lowering of tariffs. It focuses on economic cooperation, intellectual property, trade in goods and services, small and medium enterprises, e-commerce, investment, and dispute settlement. It establishes proper rules on intellectual property, investment, and competition (Ranti, 2020). The partnership is significant as it creates the largest trading bloc globally because the fifteen countries that signed the partnership contribute a third of the world’s GDP.

Theoretical Explanation of the Emergence of Regional Comprehensive Economic Partnership

Liberal Intergovernmentalism Theory

In liberal intergovernmentalism theory, the RCEP emerged as a result of the actions of national leaders. There are three motives, such as economic interdependence, national security, and nationalist motives. Such motives created the need for integration among the fifteen nations that signed the partnership agreement (Schimmelfennig, 2015). The nations decided to cooperate to outweigh or remove negative externalities that arose from the lack of a free trade agreement between them. The externalities are mutual, and through integration, they can be eliminated when intergovernmental relations occur. According to the theory, the nations are actors in the partnership, and they behave rationally (Driver, 2018). Such nations are not unitary as national preferences as established through contestations among various interest groups that exist in the nation. The nations' goals are defined domestically, and such goals might shift depending on the domestic interest groups. Also, RCEP depends on interstate bargaining, which is analyzed by first understanding each nation's internal politics. RCEP was formed because the fifteen nations' negotiators who signed the agreement found common ground in the bloc that fits their constituents (Driver, 2018).

In theory, the drivers of integration that resulted in the formation of RECP are domestic preferences. The benefits of improving the overall regional bloc will create greater stability, and the larger institution governs the states. The liberal intergovernmental theory emphasizes the change in leaders' ability in such nations to resolve disputes by using clear policies that are built in various liberal values (Driver, 2018). Through different domestic preferences, the nations form an agency where they can prosper together to a greater extent, which cannot be achieved individually. According to the theory, the whole process of forming the bloc is instilled by creating a strong regional institution that offers a venue for the settlement of disputes and a means for engagement (Schimmelfennig, 2015). Some nations in the partnership have different philosophies that guide the creation of institutions. Other nations depend on legal, diplomatic exchanges in creating an institution, while others believe in dialogue. The main drivers of integration, as the theory explains, include democracy and the efficiency of the relationships resulting from economic growth (Schimmelfennig, 2015). The unifying norm in the partnership is the promotion of democracy, which ensures institution-building, and all assumptions surrounding it should be universal in all nations involved in the partnership. However, the liberal intergovernmental theory does not provide answers to a situation where one state changes its political orientation, but the theory proposes the maintenance of identities without any changes (Driver, 2018).

Constructivism Theory

The theory of constructivism also explains the formation of RCEP, and it shifts the emergence away from state policies. The theory utilizes shared culture bonds and the effects of historical interactions at the domestic level as the major drivers in creating the regional bloc. The theory takes a more cultural-focused, normative, and ideational approach. It factors in normative and cultural interactions to supplement the state elite to determine if the bloc is pursuing an economic alliance (Kratochwil, 2017). The nations in the bloc are actors with normative behavior that relates to their different cultures. The nations interact in a social environment in the same way individuals interact.

The creation and perseverance of the bloc as per the theory depend on the member state's norms and practices. Both economic and cultural exchanges at the local level of every nation influence the strength of the relationship (Ranti, 2020). The theory includes social norms, state security, and material needs as important factors included in the Regional Comprehensive Economic Partnership. The bloc adopted a set of norms to assist in intraregional relations between its members (Driver, 2018). The norms, through their historical development, assist in understanding the essential pillars of institutions.

Realist Political Economy Theory

The Realist Political Economy theory, on the other hand, explains the emergence of RCEP as a result of the nation’s coming together for prosperity and security. The formation was motivated by the quest to gain more economic and political power. According to the theory, nations in RCEP are rational actors where hierarchical order is formed in the bloc with respect to economic and military power (Cohn & Hira, 2020). The theory asserts that the larger states in the bloc play a major role in influencing the other states to sign the agreement for their mutual benefit. The larger state in the bloc behooves other nations to cooperate with stronger ones with the same culture and ideology for their security and join a very strong collection that can dissuade any potential threats (Cohn & Hira, 2020). Thus, the theory believes that the integration's motive is the need for security and economic power by different ASEAN nations together with its five partners of free trade agreement who accepted signing the agreement.

The Regional Comprehensive Economic Partnership acts as a vehicle for the ambitions of the member states. However, there is the problem of balancing the hegemonic powers to maintain peace in the bloc because states become aggressive with respect to the advantages they get when they are at the top of the regional order. Stability is the main influencer informing the bloc as it determines its formation (Ranti, 2020). The theory links the formation of RCEP to the need to form a regional integration that has a homogenous power that can counterbalance other regional organizations like the Trans-Pacific Partnership.

Historical Institutionalism Theory

Historical Institutionalism theory explains the emergence of the Regional Comprehensive Economic Partnership to appear due to specific historical processes that change the practices and rules that existed in the past (Capoccia, 2016). The theory asserts that RCEP as an integration organization comprises historical rules and practices that condition and shape individual states' behavior. The actors who are individual nations in the bloc are motivated by preferences, which are a mixture of culturally based actions and rational choices. (Capoccia, 2016).

In historical institutionalism theory, the subsequent political developments result from existing objectives. The current bloc rules are shaped by a previous institution or bloc (Capoccia, 2016). For RCEP, its formation, objectives, rules, and practices are shaped to some extent by ASEAN, which acts as the parent organization. It is the members of ASEAN with their close allies who formed RCEP; thus, such ASEAN member states' actions can influence to a greater extent the operations of RCEP. The theory advocates for path dependency in the integration process as the early decisions in the formation of the bloc shape future policies' path, which may divert the initial intentions that decision-makers had formulated (Capoccia, 2016).

Conclusion

In conclusion, the Regional Comprehensive Economic Partnership was formed to create a free trade environment with lower tariffs for easy exchange of goods and services between the member countries. The constructivism theory best explains the Regional Comprehensive Economic Partnership formation as a multilateral institution for ten ASEAN nations and five of its free trade agreement partners. The major reason for the importance of RCEP is from high divergence in socio-cultural heritage and ethnic competition between its sixteen member states. The bloc formation is based on the widely accepted norms that have been well-known historically in such a region over a long period.

References

Capoccia, G. (2016). When do institutions “bite”? Historical institutionalism and the politics of institutional change. Comparative Political Studies, 49(8), 1095-1127. https://doi.org/10.1177%2F0010414015626449

Cohn, T. H., & Hira, A. (2020). Global political economy: Theory and practice. Routledge.

Driver, R. G. (2018). Understanding ASEAN- An alternative approach to international relations theory in Asia. Portland State University. https://pdxscholar.library.pdx.edu/cgi/viewcontent.cgi?article=5507&context=open_access_etds

Kratochwil, F. (2017). Constructivism. In Oxford Research Encyclopedia of Politics. https://doi.org/10.1093/acrefore/9780190228637.013.120

Ranti, Y., W. (2020). India’s Readiness for the Regional Comprehensive Economic Partnership Through the India–Japan Partnershiphttps://doi.org/10.18639/MERJ.2020.9900017

Schimmelfennig, F. (2015). Liberal intergovernmentalism and the euro area crisis. Journal of European Public Policy, 22(2), 177-195. https://doi.org/10.1080/13501763.2014.994020

Wu, C. H. (2020). ASEAN at the Crossroads: Trap and Track between CPTPP and RCEP. Journal of International Economic Law, 23(1), 97-117. https://doi.org/10.1093/jiel/jgz032