The Regional Comprehensive Economic Partnership (RCEP), the world’s biggest free trade deal was signed by 15 Asian-Pacific nations on November 15, 2020. The signing can be seen as a huge coup for China in extending its influences over the region and marking the dominance in Asian trade.
RCEP includes 10 economies of southeast Asia along with South Korea, China, Japan, Australia, and New Zealand, with members that account for around 30% of the global GDP.
RCEP deal was first proposed in 2012 and was finally sealed at the end of the Southeast Asian Summit as the leaders of the countries started pushing to get their pandemic-hit economies back on track.
After signing the deal virtually, Chinese Premier Li Keqiang stated that under the present global circumstances, the signing of RCEP has bought a ray of light and hope amid the clouds. He added that it shows that multilateralism is the right way and shows the right direction of the global economy and the progress of humanity.
What is RCEP and what is its objective?
RCEP was launched in 2012. It is the biggest trade pact between the ASEAN bloc of 10 members along with Japan, China, South Korea, Australia, and New Zealand.
The deal aims at lowering the tariffs, promote investment, and open up trade in services for helping emerging economies catch up to the world. RCEP specifically has been expected in helping reducing costs and time for the companies as they will be allowed to export a product anywhere within the bloc without meeting any form of separate requirements for each country.
In what way the deal will benefit China?
RCEP deal which is backed by China can be seen as a coup for Beijing as it can extend its influence across the region and will be able to mark its dominance. The deal is particularly significant as it will set new trade rules for the region, also, it has China’s backing while the US is not included. With this deal, China will also be able to draft the rules of trade in the region.
The deal will solidify China’s broader geopolitical ambitions in the region where it has faced very little competition from the United States as President Donald Trump pulled out of the deal of its own called the Trans-Pacific Partnership which was on the way to be the biggest trade pact globally.
Why India withdrew from RCEP in 2019?
Indian government withdrew from The Regional Comprehensive Economic Partnership (RCEP) in 2019 because of the concerns about the cheap Chinese goods that will be entering the country within this pact. However, India has the option of joining at a later date if it chooses.
The deal raised an alarm for the domestic producers for whom it will be hard if the country will be flooded with cheap Chinese products. Dairy, textiles, and agriculture were flagged as the three most vulnerable countries.
Comments
All Comments (0)
Join the conversation