15th November 2020 saw the signing of the Regional Comprehensive Economic Partnership (RCEP), an historic free-trade deal between China and 14 Asia-Pacific countries. It was signed over a video link, after eight years of negotiations.
The scale and potential of this deal is immense. It is one of the biggest free-trade deals in history, covering 2.2 billion people and 30% of the world’s economic output. The partners include Australia, Japan, New Zealand and South Korea, plus the 10 member states of ASEAN, which include Indonesia, Malaysia, the Philippines and Thailand.
The combined GDP of the signatories is US$26.2 trillion, or about 30% of global GDP. The deal will cover nearly 28% of global trade.
The signatories pointed to the COVID-19 pandemic as a unifying factor in their determination to meet crisis with a collective resilience, stating, “…the deal “demonstrates our strong commitment to supporting economic recovery, inclusive development, job creation and strengthening regional supply chains as well as our support for an open, inclusive, rules-based trade and investment arrangement”.
According to China’s Xinhua news agency, Chinese premier Li Keqiang, described the deal as “a victory of multilateralism and free trade”.
India, with a population of 1.4 billion, currently has reservations about joining the trading bloc, but the opportunity for it to join the partnership remains open.
Image: courtesy of Xinhua news agency