Representatives of the signing countries are pictured on screen during the signing ceremony for the Regional Comprehensive Economic Partnership (RCEP) trade agreement at the ASEAN Summit to be held on November 15, 2020 in Hanoi.
NHAC NGUN | AFP | Getty Images
Russia has formed the world’s largest free trade group of fifteen Asia-Pacific economists, a China-backed deal that excludes the United States, which has left rival Asia-Pacific under President Donald Trump.
The signing of the Regional Comprehensive Economic Partnership (RCEP) at the Regional Summit in Hanoi is yet another setback for the group, pushed by former US President Barack Obama, whose successor Trump stepped out in 2017.
Amid questions about Washington’s engagement in Asia and Washington, RCEP could more firmly cement China’s position as an economic partner with Southeast Asia, Japan and Korea, better positioning the world’s second-largest economy to shape the region’s trade rules.
The United States is missing both the RCEP and the successor to the Obama-led Trans-Pacific Partnership (TPP), leaving the world’s largest economy among the two fastest growing expanding trade groups.
In contrast, the RCEP could help Beijing reduce its dependence on foreign markets and technology, and Washington’s shift to widening gaps with Washington, said Iris Pange, chief economist at ING Greater China.
The RCEP forms a group of 10-member Association SF Southeast Asian Nations (ASIN), China, Japan, South Korea, Australia, Australia and New Zealand. It aims to gradually reduce tariffs in the coming years.
The deal was signed on the sidelines of the online Asian Summit as South Asian leaders address tensions in the South China Sea and face plans for post-epidemic economic reform in a region where US-China hostilities are on the rise.
In an unusual ceremony, held virtually due to the coronavirus epidemic, the leaders of the RCEP countries were standing behind their trade ministers, signing copies of one agreement after another, after which they showed the cameras victory.
“The RCEP will soon be ratified and signed by the signatory countries, contributing to the economic recovery of the post-Covid epidemic,” said Vietnamese Prime Minister Nguyen Xuan Phuc, who hosted the ceremony as ASEAN president.
RCEP will reach 30% of the global economy, 30% of the global population and 2.2 billion customers, Vietnam said.
‘Historical Progress’
China’s finance ministry said the new group’s promises include removing some tariffs within the group, some immediate and some more than 10 years.
There were no details on which products and which countries would see an immediate reduction in tariffs.
The ministry said in a statement without elaborating, “For the first time, China and Japan have reached an agreement to reduce bilateral tariffs rather than achieving a historic milestone.”
The deal is in a single free trade agreement between first-time rival East Asian powers, China, Japan and South Korea.
Despite being outside the RCEP and remaining in the TPP-led administration, President-elect Joe Biden – Obama’s vice president – is unlikely to rejoin the TPP any time soon, analysts say, as his government seeks a COVID-19 outbreak. Priority must be given at home.
“I’m not sure there will be more focus on trade in general,” TPP said. The subsequent factionalism of “No, including the first year or so, will focus on covid relief,” said Charles Freeman, Senior Vice U.S. This was stated by the President of Asia at the Chamber of Commerce this month.
Luong Hong Thai, head of the multilateral trade policy department at Vietnam’s Ministry of Industry and Trade, said the RCEP would “help reduce or eliminate tariffs on industrial, industrial and agricultural products and set rules for data transmission.”
The agreement will come into force once the participating countries ratify it locally in the next two years, Indonesia’s trade minister said last week.
For China, the new group, including many of its allies in the U.S., is the windfall, largely retreating from Trump’s TPP, Peng of ING said.
India pulled out of the RCEP talks in November last year, but ASEAN leaders said the door was open to join.
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