HANOI: Fifteen nations in the Asia-Pacific region have entered into the world’s largest free-trade deal, sealing an agreement that excludes the United States and extends Beijing’s economic sway in the region.
The Regional Comprehensive Economic Partnership, or RCEP, was signed today (Sunday) on the sidelines of the annual summit of the Association of Southeast Asian Nations (ASEAN), held via videoconference due to the ongoing COVID-19 pandemic.
The RCEP includes 10 Southeast Asian economies along with China, Japan, South Korea, New Zealand, and Australia, with members accounting for around 30 percent of global gross domestic product (GDP).
The RCEP deal, signed eight years after negotiations first began, covers 2.2 billion people and a third of the world’s economy, which they hope will accelerate the recovery of their economies, ravaged by the pandemic.
After the virtual signing, Chinese Premier Li Keqiang said, “Under the current global circumstances, the fact the RCEP has been signed after 8 years of negotiations brings a ray of light and hope amid the clouds.”
“It clearly shows that multilateralism is the right way, and represents the right direction of the global economy and humanity’s progress,” the Chinese premier added.
The agreement will lower tariffs and open up the services trade within the bloc does not include the United States and is viewed as a Chinese-led alternative to a now-defunct Washington trade initiative.
The pact would take effect within the next two years after all countries ratified the agreement domestically, Indonesia Trade Minister Agus Suparmanto said last week.
In this regard, China’s Ministry of Finance informed that the new pact included promises to eliminate tariffs within the group, including some immediately and others gradually over a decade.
India pulled out of the agreement last year over concerns about cheap Chinese goods entering the country and was a notable absentee during Sunday’s virtual signing.
Signatories to the agreement said they hoped New Delhi would rejoin in the future, acknowledging its strategic importance to the deal which already covers more than two billion people.
