China and 14 other Countries set world’s biggest trade pact

Vastavam web: China and 14 other countries have agreed to set up the world’s largest trading bloc, encompassing nearly a third of all economic activity, in a deal many in Asia are hoping will help hasten a recovery from the shocks of the pandemic. The Regional Comprehensive Economic Partnership, or RCEP, is to be signed virtually on Sunday on the sidelines of the annual summit of the 10-nation Association of Southeast Asian Nations.

After eight years of negotiating with blood, sweat and tears, we have finally come to the moment where we will seal the RCEP Agreement,” Malaysia’s trade minister, Mohamed Azmin Ali, said in a statement. The deal sends a signal that RCEP countries have chosen to open our markets instead of resorting to protectionist measures during this difficult time,” he said.

The accord will take already low tariffs on trade between member countries still lower, over time, and is less comprehensive than an 11-nation trans-Pacific trade deal that President Donald Trump pulled out of shortly after taking office. It is not expected to go as far as the European Union in integrating member economies but does build on existing free trade arrangements.

The deal has powerful symbolic ramifications, showing that nearly four years after Trump launched his America First” policy of forging trade deals with individual countries, Asia remains committed to multi-nation efforts toward freer trade that are seen as a formula for future prosperity. Ahead of Sunday’s RCEP special summit” meeting, Japanese Prime Minister Yoshihide Suga said he would firmly convey his government’s support for broadening a free and fair economic zone, including a possibility of India’s future return to the deal, and hope to gain support from the other countries.

The accord is also a coup for China, by far the biggest market in the region with more than 1.3 billion people, allowing Beijing to cast itself as a champion of globalisation and multilateral cooperation” and giving it greater influence over rules governing regional trade, Gareth Leather, senior Asian economist for Capital Economics, said in a report. Critics of free trade agreements say they tend to encourage companies to move manufacturing jobs overseas.

So, having won over disaffected rust-belt voters in Michigan and western Pennsylvania in the Nov. 3 election, Biden is not going to squander that by going back into TPP,” Michael Jonathan Green of the Center for Strategic and International Studies said in a web seminar. But given concerns over China’s growing influence, Biden is likely to seek much more engagement with Southeast Asia to protect U.S. interests, he said. The fast-growing and increasingly affluent Southeast Asian market of 650 million people has been hit hard by the pandemic and is urgently seeking fresh drivers for growth. RCEP originally would have included about 3.6 billion people and encompassed about a third of world trade and global GDP. Minus India, it still covers more than 2 billion people and close to a third of all trade and business activity.