While the COVID pandemic and US elections captured global attention, a significant trade agreement known as the Regional Comprehensive Economic Partnership (RCEP) was finalized. This deal includes Australia, New Zealand, Japan, China, South Korea, and the member countries of the Association of Southeast Asian Nations (ASEAN), which encompasses Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. RCEP represents 30% of the world's economy, integrating 2.2 billion individuals and a collective GDP of $26.2 trillion. By 2030, it is expected to contribute an additional $209 billion to annual incomes and $500 billion to global trade. The agreement's advantages are numerous:

• Strengthening economies weakened by the pandemic through tariff reductions
• Unifying supply chains under standardized rules of origin
• Improving consumer protection both online and offline
• Ensuring transparency in paperless trade
• Safeguarding intellectual property rights and prohibiting forced technology transfers

In summary, RCEP aims to deepen trade connections and streamline supply chains among the participating nations. Additionally, it establishes guidelines for advanced sectors such as 5G technology, digital currency transactions, and e-commerce. Several countries have already begun trading using their local currencies, facilitating China's exploration of its digital currency for international commerce. Notably absent from this agreement is the United States.

The groundwork for this trade agreement took eight years. Concurrently, the Obama administration was engaged in discussions about the Trans-Pacific Partnership (TPP), involving nations like Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. The TPP aimed to strengthen economic ties between the US and these Pacific nations by lowering tariffs to enhance trade. A critical objective was to exclude China, thereby bringing Asia closer to the US sphere of influence, similar to the Trans-Atlantic Trade and Investment Partnership (TTIP) aimed at Europe. However, under President Trump, the US withdrew from the TPP, leading the remaining countries to adopt the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This exit signified the US's retreat from Asia. The inconsistent foreign policy of the US has rendered it an unreliable ally for many partners in both Asia and Europe. As the US diminishes its role and Asia's economic power escalates, the RCEP agreement appears not only timely but also inevitable.

After the US's departure from the TPP in 2017, other Pacific nations urgently sought a new trade framework. In 2018, representatives from RCEP member countries and India convened to discuss a potential agreement. This initiative materialized in 2020, following India's withdrawal from the negotiations in 2019.

A significant aspect of this agreement is the unprecedented collaboration between Japan and South Korea with China in a comprehensive trade pact. Historically, tensions have existed between these nations, particularly regarding territorial disputes and historical grievances from World War II. Yet, they have united under this major trade agreement, which will accelerate economic and trade integration in Northeast Asia. Furthermore, ASEAN has played a pivotal role in initiating the RCEP deal, allowing China to take a backseat to minimize conflicts with Japan. Australia and New Zealand, traditionally aligned with the West, are now reconnecting with their Asian roots.

This agreement underscores Asia's rising prominence, with China at the forefront, in global economic governance. This trend has been ongoing, especially since China's accession to the World Trade Organization (WTO) in 2001, as more nations now engage in trade with China than with the US. China's economy has grown to become the second-largest globally and the largest when measured by purchasing power parity (PPP). China's leadership role has been solidified through initiatives like the Asia Infrastructure Investment Bank (AIIB), designed to rival the International Monetary Fund (IMF). Many US allies, including South Korea and Australia, became founding members of the AIIB, with the UK also joining as the first European nation. This demonstrated that even steadfast US allies are eager to benefit from China's growth. Former US Treasury Secretary Larry Summers remarked that the AIIB's establishment marked the day "America Lost its Superpower Status," urging the US to recognize the onset of a new economic paradigm. Ironically, this observation comes from Summers, who previously championed the financialization of the US economy and the outsourcing of manufacturing, which facilitated China's ascent.

The timing of the RCEP signing coincided with my reading of Parag Khanna's book, "The Future is Asian." His central thesis posits that the upcoming century will be dominated by Asia, which will reclaim its historical role at the heart of global economics and business. The RCEP agreement validates Khanna's argument as Asian nations increasingly trade among themselves, establishing their standards and regulations independent of US influence.

Moreover, this trade deal highlights the shortcomings of Trump and Pompeo's strategy toward Asia and China. A major misstep was the US withdrawal from the TPP, which created a leadership void that China subsequently filled, leading to RCEP's formation. This withdrawal was also influenced by domestic challenges in the US, as many Americans, particularly in the Rust Belt, harbored skepticism toward trade agreements that they believed jeopardized their jobs. The deindustrialization of America has caused economic hardship for many working-class citizens, and Trump capitalized on this discontent by opposing free trade agreements that "exploited the US." His decision to exit the TPP illustrates how a weakened US, facing deindustrialization and declining living standards, struggles to maintain global leadership in an evolving 21st-century landscape. Another flaw in the Trump/Pompeo approach was forcing Asian nations to choose between the US and China, a dilemma many countries prefer to avoid. While these nations appreciate their close military ties with the US and benefit from trade and investment, they recognize that China remains their most significant trading partner. Japan seeks to increase sales of Toyota vehicles to Chinese consumers, and both Japan and South Korea aim to supply semiconductors to Chinese tech companies. Australia's primary export markets are China (40%), Japan (15%), and South Korea (6.8%). ASEAN countries are eager for investments from China's Belt and Road Initiative (BRI) to enhance their infrastructure and technological capabilities. Singapore has particularly thrived amid US-China tensions, with Bytedance, the parent company of TikTok, expanding its presence there. Singapore's Prime Minister Lee Hsien Loong has explicitly stated that the country will not participate in a "cold war" against China. For these nations, economic growth and development take precedence over security concerns. They prioritize increasing trade with China and attracting investments, not jeopardizing their relationships. Even traditional US allies like Japan and South Korea are setting aside geopolitical rivalries to strengthen economic ties with China. RCEP demonstrates that, in contrast to the original Cold War, countries are unwilling to take sides between the US and China.

The future implications of this trade agreement remain to be seen. Many of these nations operate mercantilist economies, and tensions persist, such as China's restrictions on Australian imports and territorial disputes in the South China Sea. Japan's new defense minister has adopted a pro-Taiwan stance, which adds another layer of complexity.

As Asia's economy expands, European nations are also eager to deepen connections with the region. Many European countries now conduct more trade with Asia than with North America. For instance, Germany sells more Mercedes and Porsche vehicles in China than in any other market. Rolex is retracting retail licenses in the US and Europe to expand its presence in Asia. As Asian nations forge significant trade agreements with China, Europe is poised to follow suit, integrating with RCEP members to gain access to the largest trading bloc in the fastest-growing economic region. The Eurasian Economic Union (EEU), comprising Russia, Armenia, Belarus, Kazakhstan, and Kyrgyzstan, has already established a trade agreement with Vietnam. A partnership between the EEU and RCEP could complete Eurasian integration with Asia. Together, a European, EEU, and RCEP alliance, bolstered by China's BRI, could reshape economic ties across continents.

China has expressed interest in joining the CPTPP, the successor to the TPP abandoned by the US. This move would further link RCEP with other Pacific nations, including those in South America, Mexico, and Canada, further isolating the US from a significant global trading bloc.

Although India participated in RCEP negotiations, it withdrew in 2019 due to rising tensions with China. However, the trade bloc has left the door open for India to rejoin. India is the largest recipient of AIIB loans and holds significant shares in the bank. China's status as India's primary trading partner has also led to substantial investments from Chinese firms, benefitting India's technology sector. As the advantages of RCEP become apparent, India may be drawn back into the agreement. For India, as with Japan and South Korea, economic considerations may ultimately outweigh geopolitical concerns.

The incoming Biden administration will need to approach Asia differently. Coercing nations into choosing the US over China is unlikely to succeed. A more effective strategy would be for the Biden administration to re-enter the TPP negotiations, ensuring that the agreement benefits all Americans. Regardless of the administration's approach, Asia's integration and development of independent standards will continue without US involvement.