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COMMENT | Last month, 15 countries in Asia and the Pacific signed the Regional Comprehensive Economic Association. The occasion marked what could be the most significant economic achievement since the Covid-19 crisis began. And yet RCEP – or indeed Asia – alone cannot save the weakened multilateral trading system.
Undoubtedly, the RCEP is a firm repudiation of the protectionism that has been gaining ground in recent years. Economic integration is very difficult in the Asia-Pacific region due to highly variable levels of development, diverse cultures and institutional structures, and ongoing territorial disputes. But, in the face of the Covid-19 recession, the parties were eager to finalize the pact, after eight years of negotiations.
And this is not a minor trading block. Signatories include China and Japan, the world’s second and third largest national economies, respectively, as well as South Korea, Australia, New Zealand, and ten Southeast Asian countries. Therefore, the RCEP represents 30 percent of global GDP, making it the largest free trade area in the world.
Furthermore, the pact is a great step forward for regional economic integration. The signatories will remove various tariffs on imported goods, align trade rules and adhere to unified rules of origin. The agreement also includes provisions on intellectual property, public procurement, financial services, and electronic commerce.
But the RCEP has its limits. Lacks …
