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CHINA and 14 other countries have agreed to establish the world’s largest trading bloc, which encompasses nearly a third of all economic activity, in a deal that many in Asia hope will help speed recovery from the impacts of the coronavirus pandemic.
The Regional Comprehensive Economic Association, or RCEP, was signed virtually today in the framework of the annual summit of the 10-nation Association of Southeast Asian Nations (ASEAN), hosted by Vietnam.
“I am pleased to say that after eight years of hard work, starting today, we have officially brought the RCEP negotiations to a conclusion for signature,” said Prime Minister of the host country, Vietnam, Nguyen Xuan Phuc.
“The conclusion of the RCEP negotiation, the world’s largest free trade agreement, will send a strong message that affirms the leadership role of ASEAN in supporting the multilateral trading system, creating a new trade structure in the region, allowing the facilitating sustainable trade, revitalizing supply chains interrupted by Covid-19 and helping post-pandemic recovery, ”said Phuc.
The deal will take on already low tariffs on trade between member countries, even lower, over time, and is less comprehensive than an 11-nation trans-Pacific trade deal that US President Donald Trump withdrew shortly after. take office.
In addition to the 10 members of ASEAN, it includes China, Japan, South Korea, Australia and New Zealand, but not the United States.
Authorities said the deal leaves the door open for India, which withdrew due to fierce domestic opposition to its market-opening requirements, to rejoin the bloc.
It is not expected to go as far as the European Union in integrating the member economies, but builds on existing free trade agreements.
The agreement has powerful symbolic ramifications, showing that nearly four years after Trump launched his “America First” policy of forging trade deals with individual countries, Asia remains committed to multinational efforts toward freer trade that is seen as a formula for future prosperity.
Ahead of today’s RCEP “special summit” meeting, Japanese Prime Minister Yoshihide Suga said he would strongly convey his government’s support for “expanding a free and fair economic zone, including the possibility that India come back to the agreement in the future, and hope to get the support of other countries.
The deal is also a blow to China, by far the largest market in the region with more than 1.3 billion people, allowing Beijing to present itself as a “champion of globalization and multilateral cooperation” and giving it greater influence. on the rules that govern the region. trade, said Gareth Leather, a senior Asian economist at Capital Economics.
China’s official Xinhua news agency quoted Prime Minister Li Keqiang hailing the deal as a victory against protectionism, in remarks released via video link.
“The signing of the RCEP is not only a historic achievement of East Asian regional cooperation, but also a victory for multilateralism and free trade,” Li said.
ASEAN members include Cambodia, Indonesia, Laos, Burma, the Philippines, Thailand, Brunei, Singapore, Malaysia, and Vietnam.
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