10 Southeast Asian economies along with China, Japan, South Korea, New Zealand and Australia are members of The Regional Comprehensive Economic Partnership (RCEP).
Seen as a huge coup for China in extending its influence, Fifteen Asia-Pacific countries on Sunday signed the world’s biggest free trade deal, NDTV reported.
10 Southeast Asian economies along with China, Japan, South Korea, New Zealand and Australia are members of The Regional Comprehensive Economic Partnership (RCEP). The members of this partnership account for around 30 percent of global GDP.
Seen as a Chinese-led alternative to a now-defunct Washington trade initiative, the agreement to lower tariffs and open up the services trade within the bloc does not include the United States.
First proposed in 2012, the deal was finally sealed at the end of a Southeast Asian summit as leaders push to get their pandemic-hit economies back on track.
“Under the current global circumstances, the fact the RCEP has been signed after eight years of negotiations brings a ray of light and hope amid the clouds,” said Li Keqiang, Chinese Premier after the virtual signing.
“It clearly shows that multilateralism is the right way, and represents the right direction of the global economy and humanity’s progress,” he added.
Over concerns about cheap Chinese goods entering the country, India had pulled out of the agreement last year. India was a notable absentee during Sunday’s virtual signing. The country can join later if it chooses.
This deal is also seen as China’s efforts to draft the rules of trade in the region, after years of US retreat under President Donald. Through subsidiaries within member countries, US multinationals will be able to benefit from RCEP through subsidiaries within member countries. However, the deal may cause President-elect Joe Biden to rethink Washington’s engagement in the region.