China's new world order
The largest free trade area in the world came into existence over the weekend — and the U.S. was not even invited.
Why it matters: For the first time in living memory, the hegemon at the center of a major global free trade agreement is not the U.S.
- China has stepped into Uncle Sam's shoes, and now anchors the Regional Comprehensive Economic Partnership, or RCEP, an area covering 2.2 billion people and 1/3 of all the economic activity on the planet.
- RCEP includes rich democracies such as South Korea, Japan, and Australia. Their position in this major free trade area will make it that much harder for Biden to unite them against China.
- "China is negotiating a trade deal that would carve up some of the fastest-growing markets in the world at our expense," wrote then-President Obama in 2016.
- That trade deal is now reality, while America has pulled out of the TPP. There is very little chance that the U.S. will rejoin it under Biden's presidency.