RCEP: Market Implications For The West

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Asia-Pacific In The 21st Century

Intro: RCEP is the largest regional trade agreement of it’s kind. Trade and investment. Exports. Services and knowledge economy in the information age.

Standards and DeCoupling

The Myth of regionalization and DeCoupling being touted as the underline trend in the global economy has proved to primarily based on wishful thinking. Outside of a few specific technology sectors a large portion of the average American’s everyday needs are still being produced across the Pacific pond that lies to the East.

“Containerized imports to the US from Asia jumped by 31 percent from the same month in 2020 and up 27.4 percent from April 2019, according to PIERS, by IHS Markit. With 1.57 million TEU (twenty-foot equivalent unit) arriving in the US from Asia, April 2021 was the busiest April on record and the 10th consecutive month of year-over-year growth. Imports from China were particularly strong with an increase of 40.2 percent from April 2020, contributing to growing import volumes at US West Coast ports.”

In addiction strong EQ - cultural capital.

Formation of a New Global Economy

In the disruptive 4th Industrial revolution where AI and automation, Web 2.0 and increased video conferencing combine to transform the dynamics of global markets. In addiction, uncertainties around market shocks and labor shortages caused by pandemics, climate refugees and the migration of talent and capital have led to a volatile, uncertain, complex and ambiguous business environment.

East Asian Business Culture

Key Points:

  • Work ethic, Practical 9-9-6 (conservative social norms)

  • Form over function, results over activities

  • Diversity is present - but not desired or admired

  • Enterprise. talent pool human capital

Organizational Adaptation Strategy

Integration and engagement continues to provide better returns and overall prosperity to both American firms and workers along with their counterparts in East Asia. American and Western firms would be prudent to invest capital expenditure into aligning their internal structure and talent with Standard terminology, technical protocols and procedural norms and processes in how companies operate in the the Asian.

Key Risks:

  • Non tariff barriers to market entry.

  • Translation and interpretations of language barriers.

  • Cultural divides in taste and message tonality.

  • Localization of product design and offering.

  • Joint Venture business models, intellectual property rights and technology transfers.

Micro & Macro TrendsGregory GeareComment