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The RCEP will progressively reduce tariffs and aims to counter protectionism, increase investment, and allow greater freedom of movement of goods.
RCEP would also represent the first FTA between China, Japan and South Korea, the largest, second and fourth largest economies in Asia.
Previous RCEP negotiations included India, but New Delhi withdrew in 2019 due to concerns about competition with manufactured goods from China and agricultural products from Australia.
Alternative to CPTPP
RCEP has been regarded as a China-backed alternative to the US-led Trans-Pacific Partnership (TPP). The TPP reduced or eliminated tariffs on the 12 signatories, liberalized trade in goods and services, and opened up foreign investment between its member markets.
The TPP, which excluded China, was designed as part of Barack Obama’s “Pivot to Asia”. In 2016, it was signed by the United States and 11 other countries, including four ASEAN members. However, United States President Donald Trump withdrew the United States from the agreement on his first day in office in 2017. Without the United States, the other signatories agreed to a revised version of the agreement, known as the Comprehensive and Progressive Agreement. for the Trans-Pacific Partnership (CPTPP).
The CPTPP aims for stricter common standards on labor issues, environmental protection and dispute resolution than those proposed in the RCEP. Trade experts said that while the RCEP did not meet the high standards of the CPTPP, it would go a long way toward reducing trade barriers in Asia.
Commercial history
FTAs are international treaties between two nations, or several nations in a bloc, to reduce tariffs on trade and can include economic standards for the role of the state. China has committed to 24 FTAs, including 16 that have been signed and implemented. The first framework agreement was signed between China and ASEAN members in 2002.
China trade balance
China became the world’s largest exporter of goods in 2009 and the largest trading country in 2013, surpassing the United States.
