China and Russia have suffered a major setback in their global ambitions, as Japan, the world’s third largest economy, has announced its refusal to join the Regional Comprehensive Economic Partnership (RCEP) trading bloc.
The RCEP was designed to be a multilateral trade agreement between the ten Association of SouthEast Asian Nations (ASEAN) countries plus six others, including China, India, Japan, and Australia. The agreement was intended to create a free trade area that would encompass nearly one-third of the global economy—a major feather in the cap for both China and Russia.
Japan’s decision to withdraw from the negotiations at the last minute undermines these goals. While the Japanese government justified its decision as being necessary to preserve its own economic interests, the decision will nevertheless be seen as a major setback for China and Russia.
Because of Japan’s withdrawal, the RCEP agreement still may be concluded without Japan, but it is likely to be a much weaker agreement than if Japan had participated. This setback will not only hinder China and Russia in achieving their global ambitions, but will also hinder economic development in the region, particularly amongst poorer ASEAN countries.
What’s more, Japan’s refusal to join the RCEP has likely weakened China and Russia’s regional influence, as Japan remains a key economic and political power in the region. It is now likely that other countries in the region will look to Japan for greater leadership, rather than to China or Russia.
Finally, this setback serves as a reminder to China and Russia that in order to realize their ambitions they must adjust their approach and take into account the wishes and needs of key partners. Failing to do so can result in costly setbacks.
