RCEP – a sharp geopolitical instrument of ASEAN

The ASEAN community of states launched the RCEP free trade agreement in 2022 – a strategically well-thought-out move.

ASEAN – the Association of Southeast Asian Nations – was founded in 1967 in Bangkok with the goal of promoting economic, political, and cultural cooperation in the region and creating a common internal market. Today, the community of states comprises eleven member states: Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Vietnam, Laos, Myanmar, and Cambodia. As the eleventh country, Timor-Leste was also recently admitted to the association at the ASEAN summit in Malaysia at the end of October. In total, nearly 680 million people now live in the member states.

The region is considered extremely precarious in terms of security policy and geopolitics: Here, the interests and power ambitions of the two largest ASEAN trading partners – China and the USA – directly collide. Moreover, one-third of all container ships use routes through Southeast Asia. Unlike during the Cold War, however, the ASEAN states are not pursuing a classic non-alignment strategy, but increasingly a strategy of multi-alignment. Thus, a clear shift has taken place away from an ideological orientation towards a pragmatic, interest-based engagement. In practice, this means that relations are cultivated with both China and the USA, the EU, and other actors. Figures from 2024 illustrate this: ASEAN states' trade with China rose by around 15 percent, while trade with the USA increased by 12 percent and with the EU remained stable at a remarkable EUR 259 billion – making ASEAN the EU's third-largest non-European trading partner.

The Regional Comprehensive Economic Partnership (RCEP) is the world's largest free trade agreement, which came into force in 2022 and includes, in addition to the ASEAN member states, China, Japan, South Korea, Australia, and New Zealand. The member states, with their approximately 2.2 billion people, account for around 30 percent of global GDP. This agreement is, moreover, China's first multilateral free trade agreement, as it had previously favored bilateral agreements. However, the initiator of RCEP was the ASEAN states themselves – and not China, as is widely assumed. With the "ASEAN centrality“ principle, they aimed to secure their central role in the regional architecture and increase geopolitical resilience. Above all, however, the agreement also served to harmonize and deepen the numerous bilateral free trade agreements that existed at the time in the Pacific region.

Even though China is the most important RCEP player, this agreement establishes a certain economic balance between China and Japan, Korea, Australia, and New Zealand. Remarkable here is the cross-bloc contractual character between China, the states of the Global South, and Western-influenced member countries such as Australia or Japan. RCEP can be seen as Asia's answer to the failed TTIP trade agreement with the USA and also serves the ASEAN countries as an instrument to strengthen their economic resilience against US policy. Current figures show the need for this: Although the ASEAN region is generally considered to have strong growth, the forecasts for 2025 and 2026 have recently been lowered from 4.7 to 4.3 percent, mainly due to US tariffs; the USA avoided negotiating a big deal with the strong overall ASEAN and instead negotiated bilateral “tariff deals”.

For the ASEAN states, RCEP collectively forms an effective trade and geopolitical instrument to be able to act effectively together with the heavyweight China on the world stage without having to accept too strong Chinese dominance within the free trade area. Geopoliticians say that through RCEP, ASEAN does not absorb China's geopolitical power, but channels it for its own interests.

Our geopolitics event in Erfurt on December 4 with expert Ralf Schuster will delve deeper into the topic. Further information about the event and the free registration option can be found on the Event website.