From the BBC:
“RCEP:
Asia-Pacific countries form world's largest trading bloc”
Fifteen
countries have formed the world's largest trading bloc, covering nearly a third
of the global economy. The Regional Comprehensive Economic Partnership (RCEP)
is made up of 10 Southeast Asian countries, as well as South Korea, China,
Japan, Australia and New Zealand. The pact is seen as an extension of China's
influence in the region. The deal excludes the US, which withdrew from a rival
Asia-Pacific trade pact in 2017. President Donald Trump pulled his country out
of the Trans-Pacific Partnership (TPP) shortly after taking office. The deal
was to involve 12 countries and was supported by Mr Trump's predecessor Barack
Obama as a way to counter China's surging power in the region. Negotiations
over the RCEP began in 2012. The deal was signed on Sunday on the sidelines of
a meeting of the Association of Southeast Asian Nations (Asean), hosted by
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," said Vietnam's Prime Minister Nguyen Xuan Phuc. Officials took
turns signing copies of the agreement and showing them off on camera at the
virtual summit. Leaders hope that the deal will help to spur recovery from the
coronavirus pandemic. "Under the current global circumstances, the fact
the RCEP has been signed after eight years of negotiations brings a ray of
light and hope amid the clouds," said Chinese Premier Li Keqiang. Mr Li
described the agreement as "a victory of multilateralism and free
trade". India was also part of the negotiations, but it pulled out last
year over concerns that lower tariffs could hurt local producers. Signatories
of the deal said the door remained open for India to join in the future.
Members of the
RCEP make up nearly a third of the world's population and account for 29% of
global gross domestic product. The new free trade bloc will be bigger than both
the US-Mexico-Canada Agreement and the European Union. The RCEP is expected to
eliminate a range of tariffs on imports within 20 years. It also includes
provisions on intellectual property, telecommunications, financial services,
e-commerce and professional services. But it's possible the new "rules of
origin" - which officially define where a product comes from - will have
the biggest impact. Already many member states have free trade agreements (FTA)
with each other, but there are limitations. "The existing FTAs can be very
complicated to use compared to RCEP," said Deborah Elms from the Asian
Trade Centre. Businesses with global supply chains might face tariffs even
within an FTA because their products contain components that are made
elsewhere. A product made in Indonesia that contains Australian parts, for
example, might face tariffs elsewhere in the Asean free trade zone. Under RCEP,
parts from any member nation would be treated equally, which might give
companies in RCEP countries an incentive to look within the trade region for
suppliers.
^ I’m not sure
if this is a good thing or a bad thing. I guess for now it is just a thing. ^
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