Bangkok, Nov. 17, (dpa/GNA) – Covering almost one-third of the planet’s people and economic output, the new Regional Comprehensive Economic Partnership (RCEP) is being touted as “the world’s largest FTA [free trade agreement] to date,” as Singapore’s Trade Ministry put it on Sunday.
Zhao Lijian, Foreign Ministry spokesman for China, the biggest signatory nation, said on Monday that the deal “is a strong boost to regional economic recovery and global economic growth” and “shows that all parties are committed to multilateralism and free trade.”
The RCEP also includes the 10 member states of the Association of Southeast Asian Nations (ASEAN), as well as Australia, Japan, New Zealand and South Korea.
First proposed at a Cambodia-hosted Asia-Pacific summit in 2012, the RCEP shows a “strong commitment to supporting economic recovery, inclusive development, job creation and strengthening regional supply chains,” reads a statement released by the signatory governments.
Others have been more guarded in their endorsements, however, pointing out that most of the 15 countries have already signed myriad similar-but-smaller deals with each other, including nonetheless far-reaching arrangements such the decade-old ASEAN-China FTA.
The United Nations Conference on Trade and Development (UNCTAD) said the RCEP merely “could help revive post-Covid economic growth, boost intra-regional trade and investment links at a time of global trade tensions and provide a framework for further regional cooperation.”
Taking eight years to negotiate, the RCEP’s 510 pages are appended with tariff details running to thousands more pages – more than 2,000 just for South Korea.
The RCEP “will take some time to unravel,” according to Deborah Elms, executive director of the Singapore-based Asian Trade Centre, a research organization. “Governments can be quite creative in burying important details inside of different provisions,” Elms said.
And despite the RCEP’s complexity, Elms said it nonetheless “could be more ambitious overall.”
India, the world’s second most populous nation and fifth-biggest gross domestic product (GDP), dropped out of RCEP talks one year ago over concerns its businesses were not ready for foreign competition.
“RCEP will have a marginal impact on trade, [especially] without India. Most members already have equal or better deals with each other,” said Greg Poling, senior fellow at the Center of Strategic and International Studies’ Southeast Asia Program said on Twitter.
The United States – the biggest Asia-Pacific economy of all – is also not involved in the RCEP.
Then-president Barack Obama attended the 2012 summits when RCEP was first proposed, but the US was by then leading negotiations on a separate trade deal known as the Trans-Pacific Partnership (TPP).
The US later withdrew from that deal after Donald Trump was elected president in 2016.
While the RCEP was proposed by the 10-nation bloc known as ASEAN, China’s economic clout and the absence of the US from both the RCEP and the TPP has fuelled speculation that regional trade will increasingly be dominated by China, which is on track to overtake the US as the world’s biggest economy before mid-century.
“It’s still a significant loss for the US to be off pouting in the corner while others forge ahead with economic rule making,” Poling said.
GNA