Fifteen Asia-Pacific economies formed the world's largest free trade bloc on Sunday (16.11.2020), a China-backed deal that excludes the United States, which had left another regional grouping under President Donald Trump.
The signature of the Regional Comprehensive Economic Association (RCEP) at a regional summit in Hanoi is a further blow to the group spearheaded by former President Barack Obama that Trump abandoned in 2017.
RCEP can cement the presence of China as an economic partner with Southeast Asia, Japan and Korea, leaving the world's second-largest economy in a better position to shape the region's trade rules.
The United States is absent from both RCEP and the Obama-led successor to the Trans-Pacific Partnership (TPP), leaving the world’s largest economy outside two trade groups that span the world’s fastest-growing region. RCEP groups the 10 members of the Association of Southeast Asian Nations (ASEAN), China, Japan, South Korea, Australia and New Zealand. Its goal in coming years will be to progressively reduce tariffs in many areas.
The deal was signed on the sidelines of an online ASEAN summit held as Asian leaders discuss tensions in the South China Sea and plans for a post-pandemic economic recovery.
In a rare ceremony, leaders of RCEP countries took turns backing their trade ministers who, one by one, signed copies of the agreement, which they then triumphantly showed to the cameras. “The RCEP will soon be ratified by the signatory countries and enter into force, contributing to the post-COVID economic recovery,” said Nguyen Xuan Phuc, Prime Minister of Vietnam, who hosted the ceremony as ASEAN chair.
RCEP will represent 30% of the world's economy and population and reach 2.200 billion consumers, Vietnam said.
China's Finance Ministry said the new bloc's pledges include eliminating tariffs within the group, some immediately and over 10 years. There were no details on which products and countries would benefit from the measures.
The agreement marks the first time that China, Japan and South Korea have entered into a single free trade agreement.
Source: Reuters
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