Ratified by 10 economies . . .
On Wednesday, Australia and New Zealand announced their ratification of the Regional Comprehensive Economic Partnership (RCEP). Their ratification pushes the trade deal past its minimum requirement to enter into force, which includes ratification by a minimum of six ASEAN members and three of the five partner countries. So far, the deal has been ratified by Brunei, Cambodia, Laos, Singapore, Thailand, Vietnam, Australia, China, Japan and New Zealand. The remaining signatories that have not officially ratified the trade deal are Indonesia, Malaysia, Myanmar, the Philippines, and South Korea. The agreement will enter into force on January 1 among the 10 states that have ratified the agreement.
World’s largest trade agreement . . .
RCEP is an ambitious agreement with 15 signatories that encompass 28 per cent of global GDP and almost 50 per cent of the global population. It is expected to boost the signatories’ economies by eliminating tariffs on approximately 90 per cent of commodities traded in the region, and standardizing rules on investment, intellectual property, and e-commerce, among others. The deal focuses on integrating East and Southeast Asian markets by providing a framework for facilitating trade and harmonizing trade policy among ASEAN countries and the countries with which it has individual free trade agreements. India took part in initial RCEP discussions and negotiations but opted out in 2019 due to concerns that the deal would strain its domestic economy.
A balancing act for some Asia Pacific economies . . .
Some pundits view China’s centrality in RCEP as its response to the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership, a large regional trade agreement that initially excluded China. Concerned parties worry that RCEP will further solidify China’s economic foothold in the Asia Pacific. RCEP has also been criticized for its lack of progressive elements, with no working group to discuss measures to address poor labour practices or environmental standards. But some countries that have previously had poor diplomatic and trade relations with China, such as Australia, seem to have to some extent put the past behind them to benefit from the economic windfalls inherent in the agreement. Countries that support progressive trade practices and have signed RCEP, such as New Zealand, find themselves balancing pragmatic and progressive elements in their trade agreements.