Reports from Hanoi, Vietnam state that China, Japan, Australia, and 12 other states have secured a deal to establish the world’s largest trading bloc. The deal was agreed upon this Sunday, it comprises approximately a third of all economic activity around the globe. This agreement is aimed at recovering the economy from the losses incurred by the global pandemic. The deal is being referred to as the Regional Comprehensive Economic Partnership (RCEP), it constitutes the world’s largest free trade deal.
China, Japan, and Australia make strides with RCEP
The deal was signed virtually on the sidelines of the annual summit that comprises the 10-nation Association of Southeast. The ASEAN states comprise Cambodia, Indonesia, Laos, Myanmar, the Philippines, Thailand, Brunei, Singapore, Malaysia, and Vietnam. “I am delighted to say that after eight years of hard work, as of today, we have officially brought RCEP negotiations to a conclusion for signing,” Nguyen Xuan Phuc, the Prime Minister of Vietnam.
He further reiterated that this deal will reinforce the fact that the Association of Southeast Asian Nations is playing a key role in assisting a multilateral trading system. This system will entail a new trading structure in the region, this structure aims to assist in establishing sustainable trade facilitation by revitalizing supply chains hindered by COVID-19. The deal will mainly assist in post-pandemic recovery.
This accord is much less comprehensive than the 11-nation trans-Pacific trade deal that was revoked after President Donald Trump took the office in 2016. Apart from the 10 states of the Association of Southeast Asian Nations, the deal includes China, Japan, South Korea, Australia, and New Zealand. The United States is not involved. Officials in charge of the deal also reiterated that they leave an open door for Indians to join. India dropped out due to domestic opposition that was subjected to its market-opening requirements.
World’s largest free trade deal
The deal also sends a powerful symbolic message across the globe. Just four years ago, Trump announced the launch of the “America First” policy, this policy forged trade deals with several states. Asian states remain focused on the idea of multi-nation efforts towards freer trade. Cooperation between states is the recipe for future prosperity.
“The signing of the RCEP is not only a landmark achievement of East Asian regional cooperation but also a victory of multilateralism and free trade,” China’s Premier Li Keqiang said. He further said that the deal is a win against the menace of protectionism. After decades of struggling to bridge their economic differences, the agreement will assist China, Japan, and South Korea to secure a trilateral free trade deal.
The RCEP would have initially comprised approximately 3.6 billion citizens in total which constitutes about a third of global trade and the global GDP. However, India still has more than 2 billion citizens and close to a third of all trade and business activity.