Asia-Pacific leaders create world’s largest trade partnership
The Regional Comprehensive Economic Partnership (RCEP) will be signed today after nearly seven years of negotiations.
Once thought destined to fail due to complex relationships amongst its signatories, RCEP—a China-led economic bloc comprising one-third of the world’s gross domestic product—will be the largest trade agreement in the world. Expected signatories include China, South Korea, Japan, Australia, New Zealand and the 10 ASEAN countries. Notably absent from the partnership is India, which withdrew from negotiations last November after citing concerns over the dumping of cheap foreign manufacturing and agricultural products in the Indian domestic market.
Originally envisioned as a counter to US Indo-Pacific economic influence, RCEP is the Chinese-backed vision for the region’s future in trade and international standards. The agreement will push forward the region’s move to free trade, but lacks provisions on protecting workers and the environment. The formalisation of the partnership today locks the US out of the region’s two trade agreements and aligns several key US allies closer to China, which will require a response from Washington. Expect China to start using this new leverage to establish international standards and to cement the economic ties that bind the signatories to China in law.
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