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It’s called the Regional Comprehensive Economic Association (RCEP) and it is the world’s largest trade agreement in terms of Gross Domestic Product (GDP). The agreement, supported by China, was signed this Sunday by 15 countries in Asia and the Pacific, at the end of the summit of the Association of Southeast Asian Nations (ASEAN), which was held virtually due to the pandemic.
This pact was proposed in 2012 and is seen as the Chinese reaction to a similar initiative launched by the United States during the presidency of Barak Obama and, meanwhile, abandoned by the government of outgoing President Donald Trump.
The agreement, which opens the way for the creation of a free trade zone, covers ten economies in Southeast Asia (Indonesia, Thailand, Singapore, Malaysia, the Philippines, Vietnam, Burma, Cambodia, Laos and Brunei) plus China, Japan, Korea . South, New Zealand and Australia, which represent around 30% of world GDP and where more than 2 billion people live.
“I am very pleased that after eight years of complex negotiations, we can officially conclude the RCEP negotiations today,” said Prime Minister Nguyen Xuan Phuc of Vietnam, the country that holds the rotating presidency of ASEAN.
Chinese Prime Minister Li Keqiang pointed out that the fact that the RCEP was signed after eight years of negotiations and with the world in the face of a pandemic, “puts a ray of light and hope in the midst of clouds “.
“This clearly shows that multilateralism is the right path and represents the right direction for the world economy and for the progress of mankind,” the Chinese prime minister was quoted as saying by AFP.
India had planned to join this unprecedented trade pact, but decided last year to pull out for fear of an invasion of cheap Chinese goods into its domestic market.
New Delhi, however, reserved the option to join this agreement later.
The RCEP is a “great step toward liberalizing trade and investment” in the region, said Rajiv Biswas, chief economist for Asia and the Pacific at IHS Markit, a consultancy.
The signing of the agreement appears in a context of economic crisis, due to the covid-19 epidemic.
This trade pact is also widely seen as a way for China to expand its influence in the region, following the isolationism adopted by the United States during the presidency of Donald Trump.
