As many as fifteen Asia-Pacific nations on Sunday signed the world’s biggest free trade deal. However, it has been seen as a huge coup for China in extending its influence.
Known as the Regional Comprehensive Economic Partnership (RCEP), it includes 10 Southeast Asian economies that include China, Japan, South Korea, New Zealand, and Australia, with members accounting for around 30 percent of global GDP.
The idea was conceived and proposed in 2012, and the deal was finally sealed at the end of a Southeast Asian summit as leaders pushed to get their pandemic-hit economies back on track.
“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 after the virtual signing.
“It clearly shows that multilateralism is the right way, and represents the right direction of the global economy and humanity’s progress.”
This is mainly seen as a China-led alternative as the agreement to lower tariffs and open up the services trade within the bloc does not include the United States.
India not part of the agreement
While so many Asian nations made their presence felt, India on the other hand pulled out of the agreement last year. It has nothing to do with the recent border disputes in Ladakh. India opted out of the deal because of the threat of cheap Chinese goods entering the country.
However, India can join at a later date if it chooses to. But, despite India being not there, the deal covers more than two billion people.
The deal would help countries and companies to export products anywhere within the bloc with fewer or zero separate requirements. It will also shrink the costs for companies.
The agreement will affect only the intellectual property, and environmental protection and labor rights are not part of the pact.