While Asia has been an exporting powerhouse for decades, it has not been particularly focused on buying and selling goods and services to neighbors. This is changing. One thing that is missing, however, is a structure to manage an evolving economic landscape for Asia. The existing institutional arrangements do not suit a future order very well. There are only two organizations that might play a role: the Association of Southeast Asian Nations (ASEAN) and Asia-Pacific Economic Cooperation (APEC). The former consists of 10 countries in Southeast Asia while the latter includes 21 members, many of whom are not in Asia. However, 16 countries have spent years working on a trade arrangement for Asia: the Regional Comprehensive Economic Partnership (RCEP). The 16 member governments (Australia, Brunei, Cambodia, China, India, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, South Korea, Thailand, and Vietnam) are struggling to complete negotiations on the FTA for November. The stakes for RCEP are greater than most participants imagine. If the world is, indeed, watching a new “Berlin Wall” moment, RCEP is likely to become a critically important part of the new world order. It is the only readily available platform for managing trade and economic issues in Asia.
When passed, the European Union (EU) Goods Package, as the legislation is called, will have ramifications to e-commerce that are at least as significant than the move by some countries to reduce or eliminate de minimis thresholds. Small and Medium Enterprises (SMEs) who sell online into the EU will be the most severely affected. The added administration and compliance requirements could cost businesses as much as €2,500 annually. This amount could equal the annual margins of some smaller firms that sell online today. Firms from Asia are especially at risk.