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The Asia Pacific countries, including China, Japan and South Korea, signed the world’s largest regional free trade agreement on Sunday, covering nearly a third of the world’s population and GDP.
Top officials from 15 countries, including Australia, New Zealand, and 10 members of the Association of South East Asian Countries made the Regional Comprehensive Economic Partnership, or RCEP – in nearly a decade – the last day of the 37th ASEAN summit virtually Vietnam Organized by.
“The completion of the negotiations is a strong message confirming ASEAN’s role in supporting the multilateral trade system,” Vietnamese Prime Minister Nguyen Juan Fuch said ahead of the virtual signing ceremony. He said the agreement would “contribute to developing supply chains that have been disrupted due to the epidemic as well as supporting economic recovery,” he said.
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Singapore’s Trade and Industry Minister Chan Chun Sing told reporters after the signing that six ASEAN countries, in addition to the three non-ASEAN partners, should implement the RCEP. Singapore said it plans to approve the deal “within the next few months”.
Proponents of the trade pact, which includes 2.2 billion people with a combined GDP of $ 26.2 trillion, said it would reduce the tariff, strengthen supply chains with common rules of origin and codify new e-commerce regulations. – will promote weak economies.
The benefits of the agreement include the elimination of tariffs of at least 92% on trade goods between participating countries, as well as stronger provisions to address non-tariff measures, and areas such as online consumer and personal information protection, transparency and paperless Includes an increase in. Trade, according to a statement released on Sunday by Singapore’s Ministry of Trade and Industry. It also includes simplified border procedures, while at least 65% of service sectors will be fully open with increased foreign shareholding limits.
Negotiators ended the deal after surprising participants at the end of last year. Prime Minister Narendra Modi said that he is worried about how RCEP will affect the livelihood of Indians, especially the weakest. However, India will be allowed to rejoin the trade agreement.
Economist Sean Roche, head of Asia Pacific for S&P Global Ratings, said, “India’s permission to join at a later date is symbolic and reflects China’s desire to build economic bridges with the region’s third-largest economy.”
Malaysia acknowledged that the difficulties India is facing, Prime Minister Muheedin Yasin said in a speech on Sunday.
“Nonetheless, we would like to express our continued support and welcome its return to RCEP in the future.”
Experts said whether or not RCEP changes regional dynamics in China’s favor depends on the US response. The agreement underscores how US President Donald Trump’s 2017 decision to withdraw from a separate Asia Pacific trade agreement – the Trans-Pacific Partnership or TPP – has offered the US a counterbalance to China’s growing regional economic impact Reduced capacity.
If this challenge shifts to President-Elect Joe Biden, if expected, he will be officially named the winner of the November 3 election. Still unsure how the Biden team will approach trade deals and whether it tries to re-enter the TPP of 11 countries.
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RCEP signatures Southeast Asian nations experience disproportionate recovery from the coronovirus epidemic.
Governments across the region are negotiating for fits and lanes in bubbles and officials have begun to weigh health risks with economic needs. Malaysia, Indonesia, and the Philippines are still among those working with elevated virus caseloids, while Singapore and Vietnam have so far successfully prevented new outbreaks.
Japanese Trade Minister Hiroshi Kaziyama told reporters Sunday that Japan is looking for a catalyst for its post-coronavirus economy.
“Through tariff removal, I believe there will be a major impact on improving Japan’s exports and making the region’s supply chain more efficient,” he said. “I am confident that we are creating free and fair economic regulations through the demands of data free flow and technology transfer, as well as the imposition of new rules on the protection of intellectual property.”
The agreement will make exports from participating countries more competitive and create a unified market for China and regional countries, Chan of Singapore said.
“In the past years, there have been many ups and downs and it’s certainly not an easy journey,” he said. “At one point, the prospects of concluding the agreement were shaken by geopolitical and domestic prejudices. All of us have had to trade hard to move the negotiations forward. “
– With assistance by Lin Zhu, and Yuko Takeo
(The fourth paragraph updates the story with Singapore’s trade minister.)