China and 14 other countries agreed on Sunday to set up the world’s largest trading bloc, which covers nearly a third of all economic activity, in an agreement many are hoping in Asia to help recover from the shock of the epidemic. Will get
The Regional Comprehensive Economic Partnership or RCEP was signed on Sunday to mark the 10-nation annual summit meeting of Southeast Asian countries.
The host country’s Prime Minister Nguyen Xuan Phuc said, “I am pleased to say that after eight years of hard work, to date we have officially brought the RCEP negotiations to a conclusion to sign.”
“The conclusion of the RCEP negotiations, the largest free trade agreement in the world, will send a strong message that reaffirms ASEAN’s leading role in supporting the multilateral trade system, creating a new trading framework in the region, which will enhance sustainable trade facilitation Enables, reactivates the supply. The chain was interrupted by COVID-19 and helped to correct the post pandemic.
The deal would impose already lower tariffs on trade between member states, over time, and is less comprehensive than the 11 countries’ trans-Pacific trade deal that President Donald Trump pulled out soon after assuming office .
In addition to the 10-member Association of Southeast Asian Countries, it includes China, Japan, South Korea, Australia and New Zealand, but not the United States. Officials said the deal left the door open for India, which moved out due to fierce domestic opposition to market needs, so that the block could be reopened.
It is not expected to go as far as the European Union in integrating member economies, but builds on the existing free trade regime.
The deal has powerful symbolic implications, showing that nearly four years after Trump began his “America First” policy of pursuing trade deals with individual countries, Asia was in favor of multi-nation efforts for those free nations. Committed to those who are seen as a formula for future prosperity.
Ahead of Sunday’s RCEP “special summit” meeting, Japanese Prime Minister Yoshihida Suga said he would “strongly express his government’s support to broaden the free and fair economic zone, including India’s return to a future deal,” The deal and hopes to gain support are also included. ” Other Countries. “
The agreement is also a coup for China, allowing Beijing, the region’s largest market with more than 1.3 billion people, to present itself as the “champion of globalization and multilateral cooperation” and govern regional trade. The rules have more influence, Gareth Leather, senior Asian economist at Capital Economics, said in a report.
China’s state-run Xinhua News Agency quoted Premier Li Keqiang, praising the agreement as a victory against protectionism, in a comment via a video link.
“The signing of the RCEP is not only a historic achievement of East Asian regional cooperation, but also a victory for multilateralism and free trade,” Lee said.
Now that Trump’s rival Joe Biden has been declared president-elect, the region wants to see how US policy on trade and other issues will develop.
Analysts are skeptical of re-enforcing the Trans-Pacific Trade Agreement or withdrawing many US sanctions imposed on China by the Trump administration due to Beijing’s trade and human rights records and espionage and technology piracy charges Biden will have to work hard.
Critics of free trade agreements say they encourage companies to move manufacturing jobs overseas. Therefore, winning the frustrated rust-belt voters in Michigan and western Pennsylvania in the November 3 election, Michael Jonathan Green of the Biden “Center for Strategic and International Studies” said it was not going back to the TPP. A web seminar
But expressing concern over China’s growing influence, Biden is likely to seek a greater engagement with Southeast Asia to protect American interests.
The fast-growing and rapidly thriving Southeast Asian market of 650 million people is in the grip of an epidemic and is looking for new drivers for growth.
The RCEP will basically cover around 3.6 billion people and will comprise about a third of world trade and global GDP. Minus India, it still covers more than 2 billion people and accounts for close to a third of all business and business activities.
The United States-Mexico-Canada Agreement, or USMCA, an older version of the North American Free Trade Agreement under Trump, slightly reduces economic activity, but is less than one-tenth of the world’s population. The European Union and the Comprehensive and Progressive Trans-Pacific Partnership, the revised version of the deal rejected by Trump, are also smaller. The RCEP consists of six of the 11 members of the CPTPP.
India failed to expose its farmers and factories to more foreign competition. Among other concerns, Indian dairy farmers are concerned about competition from New Zealand and Australian milk and cheese producers. Automakers fear importing from across the region. But overall the biggest fear is the flood of manufactured goods from China.
Trade and investment flows within Asia have expanded substantially over the past decade, a trend that has intensified fights between the US and China, which have imposed punitive tariffs of billions of dollars on each other’s exports.
The RCEP agreement is loose enough to meet the heterogeneous needs of member states of countries as diverse as Myanmar, Singapore, Vietnam and Australia. Unlike CPTPP and the EU, it does not set unified standards on labor and the environment and is committed to opening up countries or other vulnerable sectors of their economies.
But it sets rules for trade that will facilitate investment and other business within the region, Jeffrey Wilson, research director at the Perth USA Center, said in a report for the Asia Society.
“RCEP is, therefore, a much needed platform for COVID recovery after the Indo-Pacific,” he wrote.
ASEAN members include Cambodia, Indonesia, Laos, Myanmar, Philippines, Thailand, Brunei, Singapore, Malaysia and Vietnam.
Associated Press writers Hau Dinh in Hanoi and Mari Yamaguchi in Tokyo contributed.