On Sunday, China and 14 other countries agreed to develop the world’s largest trading bloc, covering only about a third of all economic growth, an agreement that many in Asia hope will help boost the rebound from the coronavirus epidemic.
On Sunday, virtually on the sidelines of the annual summit of the 10-nation Association of Southeast Asian Nations, the Regional Comprehensive Economic Partnership (RCEP) was signed.
“I am delighted to say that after eight years of hard work, as of today, we have officially brought RCEP negotiations to a conclusion for signing,” said host country Vietnam’s Prime Minister Nguyen Xuan Phuc.
“The completion of the RCEP negotiations, the world’s largest free trade agreement, will send a clear message that reaffirms ASEAN’s leading position in promoting the global trading system, establishing a new trading mechanism in the region, encouraging fair trade, revamping distribution networks disrupted by COVID-19 and helping to recover after the pandemic,” Phuc said.
The agreement will take on lower and lower trade barriers between the Member States over time and is less expansive than the 11-nation trans-Pacific trade agreement that President Donald Trump withdrew from assuming office.
This includes China, Japan, South Korea, Australia, New Zealand, and the 10-member Group of Southeast Asian Nations and not the United States. Authorities said the agreement leaves India open to rejoin the bloc, which dropped out because of fierce domestic resistance to its market-opening requirements.
In integrating member economies, it is not supposed to go as far as the European Union, but it is based on current free trade deals.
The agreement has clear symbolic implications, illustrating that almost four years after Trump initiated his “America First” strategy of forging trade agreements with sovereign countries, Asia strongly dedicated to multi-nation global trade initiatives, which are seen as a recipe for potential prosperity.
Gareth Leather, the senior Asian economist for Capital Economics, said in a study that the agreement is also a coup for China, by far the largest market in the region with more than 1.3 billion people allowing Beijing to cast itself as a “champion of globalization and multilateral cooperation” and giving it greater control over the rules regulating regional trade.
Over the past decade, foreign direct investment flows within Asia have increased significantly, a development that has intensified in the midst of bickering between the United States And china, which have levied trade sanctions worth billions of dollars on each other’s exports.