Regional Comprehensive Economic Partnership (RCEP) can be identified as historical agreement between some of the ASEAN members and major regional powers.
In this article, I share some important points about the Regional Comprehensive Economic Partnership (RCEP) that you should know. So let’s begin.
What is RCEP?
Regional Comprehensive Economic Partnership was signed between 15 countries including 10 South East Asian countries, South Korea, China, Japan, Australia and New Zealand.
The negotiations started on 2012 and the deal was signed in 2020 November 15 on the sidelines of a meeting of ASEAN.
The main objective of this trade bloc is to recover from the Economic recession due to the Covid-19.
What are the importance of the RCEP?
The newly signed trade deal covers nearly a third of the global economy.
Most experts predicted that, China as a part of the deal, can boost the GDP of the member states of the RCEP.
Even though China has many bilateral agreements, this is the first time that China has signed up to a regional trade pact.
The RCEP is bigger than US-Mexico, Canada agreement and European Union.
Experts in the field predicted that the trade deal can increase the global national income by $186 billion annually by 2030.
What are included in the RCEP?
RCEP is not as comprehensive and doesn’t cut tariffs as Trans-Pacific Partnership.
Under the RCEP, members expected to eliminate a range of tariffs on imports within 20 years.
RCEP contains provisions on intellectual property, telecommunication, financial services, e-commerce etc.
What will be the next?
As for many experts, this trade deal can be seen as an extension of China’s influence in the region. Also South East Asian region is very crucial for trade because of the population.
Indian factor is very important in this deal. At the beginning of negotiations, India was a part. But India pulled out last year because the lower tariffs can hurt for the domestic industries of the country. But the member states hope that India will join again with the bloc.
Under the Trump administration, US practiced an isolationist approach towards international relations. For instance, He pulled out the country from Trans-Pacific Partnership. But under the Joe Biden’s administration, many experts expect that US will rejoin Trans-Pacific Partnership and will seek more opportunities to engage with Indo Pacific region.
As an overall, Regional Comprehensive Economic Partnership is very crucial trade deal because it already covered the most important countries in the world including US allies like South Korea and Japan. Also this may be a geopolitical and economic trick of China to beat US. However, join India to the bloc is a need. Finally, if it is going to be success, it will be a great step in multilateralism.