RCEP Dominates Global GDP at 30%, Challenging US Market Amid Deepening Geopolitical Divide

The economic and geopolitical landscape is increasingly shaped by a strategic contest between major trade blocs, as highlighted by geopolitical analyst Velina Tchakarova. In a recent social media post, Tchakarova pointed to the critical choice between "Access to RCEP vs US market amid Cold War 2 between America and the Dragon-Bear." This statement encapsulates the growing bifurcation of the global system, where regional economic partnerships and great power rivalries define international relations.

The Regional Comprehensive Economic Partnership (RCEP), which entered into force in January 2022, stands as the world's largest free trade agreement. Comprising 15 Asia-Pacific nations, including China, Japan, South Korea, Australia, New Zealand, and the ten ASEAN member states, RCEP accounts for approximately 30% of global GDP, 28% of global trade, and 30% of the world's population. The agreement aims to eliminate 90% of tariffs among its members over 20 years and harmonizes rules of origin, fostering deeper regional supply chains.

In response to this expanding Asian economic integration, the United States launched the Indo-Pacific Economic Framework for Prosperity (IPEF) in May 2022. IPEF includes 14 partners, among them Australia, Japan, South Korea, and several ASEAN nations, but notably excludes China. Unlike traditional free trade agreements, IPEF does not offer tariff reductions or enhanced market access. Instead, it focuses on four pillars: trade (excluding tariffs), supply chains, clean economy, and fair economy, positioning itself as a framework for "21st-century trade issues."

The "Cold War 2.0" referenced by Tchakarova describes a deepening rift between the United States and the "Dragon-Bear" alliance, a term she coined to denote the strategic convergence of China and Russia. This geopolitical competition manifests across economic, technological, and military domains, leading to a bifurcation of global systems. The Dragon-Bear alliance seeks to counterbalance US influence, with both nations coordinating efforts in international forums and exploring alternatives to the US-dominated financial architecture.

Velina Tchakarova, founder of FACE and a visiting fellow at the Observer Research Foundation, has extensively analyzed this evolving global order. Her work emphasizes the strategic maneuvering of major powers through geoeconomic pressures and regional influence rather than direct military confrontation. The choice between RCEP and the US market, therefore, represents a strategic alignment for nations navigating this increasingly polarized international environment.

The contrasting approaches of RCEP and IPEF underscore the differing visions for global economic governance. RCEP promotes deep regional integration through traditional trade liberalization, while IPEF seeks to establish new standards and norms in critical areas without offering market access. The ongoing competition between these blocs, set against the backdrop of a "Cold War 2.0" between the US and the Dragon-Bear, will continue to reshape global trade patterns and geopolitical alliances in the coming years.