Representatives of the signatory countries are depicted on screen during the signing ceremony for the Regional Comprehensive Economic Partnership (RCEP) trade agreement at the ASEAN Summit to be held online in Hanoi on November 15, 2020.
NHAC NGUYEN | AFP | Getty Images
Fifteen Asia-Pacific economies on Sunday formed the world’s largest free trade bloc, a China-backed deal that excludes the United States, which had formed a rival Asia-Pacific group under President Donald Trump.
The signing of the Regional Comprehensive Economic Partnership (RCEP) at a regional summit in Hanoi is another setback for the group pushed by former US President Barack Obama, which his successor Trump pulled out in 2017.
Amid Washington’s preoccupation with Asia, the RCEP could further strengthen China’s position as an economic partner with Southeast Asia, Japan and Korea, bringing the world’s second-largest economy to better trade regulations for the region. Can.
The United States is absent from both the successor of the RCEP and the Obama-led Trans-Pacific Partnership (TPP), which extracts the world’s largest economy from two trade groups that span the fastest-growing region on Earth.
In contrast, RCEP could help Beijing cut its dependence on foreign markets and technology, a shift accelerated by a deep rift with Washington, said Iris Pang, ING chief economist for Greater China.
The RCEP groups the 10-member Association of Southeast Asian Nations (ASEAN), China, Japan, South Korea, Australia and New Zealand. It aims to have progressively lower tariffs in many areas in the coming years.
The agreement was signed on the occasion of an online ASEAN summit as Asian leaders addressed tensions in the South China Sea and to tackle plans for post-pandemic economic recovery in an area where the US-China rivalry Increasing.
In an unusual ceremony virtually held due to the coronovirus epidemic, leaders of RCEP countries stand behind their trade ministers, who sign copies of the agreement one by one, which they then triumphantly show to the cameras.
Vietnam’s Prime Minister Nguyen Juan Fuchh, hosting the ceremony as ASEE Chair, said, “The RCEP will soon be ratified by the signatory countries and the COVID epidemic will contribute to economic recovery.”
RCEP will reach 30% of the global economy, 30% of the global population, and 2.2 billion consumers, Vietnam said.
China’s Finance Ministry said the promises of the new block included the elimination of certain tariffs within the group, including some immediately and those over 10 years old.
There was no explanation on which products and which countries would have immediate reduction in tariffs.
“For the first time, China and Japan reached a system of bilateral tariff cuts,” the ministry said in a statement, without any details.
The deal marked the first time a single free trade agreement was signed between rival East Asian powers China, Japan and South Korea.
Despite the exit of the RCEP and being in administration, the TPP, President-Elect Joe Biden – Obama’s vice president – is unlikely to rejoin the TPP anytime soon, analysts said, because his government was COVID- Priority has to be given at home to deal with the outbreak of 19.
“I’m not sure that much attention will be paid to business in general, including efforts to reorganize TPP’s successor group,” so that would be such a focus on COVID relief, “Charles Freeman, senior vice president The president said this month for Asia at the US Chamber of Commerce.
RCEP will “help reduce tariffs on industrial and agricultural products or create regulations for data transmission,” said Luong Hoang Thai, head of the Department of Multilateral Trade Policy at Vietnam’s Ministry of Industry and Trade.
The trade minister of Indonesia said the treaty would have a one-time impact on the agreement of sufficiently participating countries within the next two years, Indonesia’s trade minister said.
For China, the new group, including several US allies, is largely a windfall as a result of ING’s punging Trump’s retreat from the TPP.
India withdrew from the RCEP talks in November last year, but ASEAN leaders said the door was open to join it.