Asia-Pacific closes in on world’s biggest trade deal

BANGKOK: Fifteen Asia-Pacific economies are set to conclude talks on Sunday and sign what could become the world’s largest free trade agreement, covering nearly a third of the global population and about 30 per cent of its global gross domestic product.
The Regional Comprehensive Economic Partnership (RCEP), which could be approved at the end of a four-day ASEAN summit in Hanoi, will progressively lower tariffs and aims to counter protectionism, boost investment and allow freer movement of goods within the region.
A US-China trade war and US President Donald Trump’s “America First” retreat from predecessor Barack Obama’s “pivot” towards Asia has given impetus to complete RCEP, which is widely seen as Beijing’s chance to set the regional trade agenda in Washington’s absence.
The US election win by Democrat Joe Biden, however, could challenge that, with the former vice-president signalling a return to stronger US multilateralism.
RCEP includes China, Japan, South Korea, Australia, New Zealand and the 10 members of the Association of South East Asian Nations (ASEAN) — Brunei, Vietnam, Laos, Cambodia, Thailand, Myanmar, Malaysia, Singapore, Indonesia and the Philippines. India was involved in earlier discussions but opted out last year. One of the deal’s biggest draws is that its members already have various bilateral or multilateral agreements in place, so RCEP builds on those foundations. It will allow for one set of rules of origin to qualify for tariffs reduction with other RCEP members. A common set of regulations mean less procedures and easier movement of goods. This encourages multinational firms to invest more in the region, including building supply chains and distribution hubs.
The idea of RCEP was hatched in 2012 and was seen as a way for China, the region’s biggest importer and exporter, to counter growing US influence in the Asia-Pacific under Obama. — Reuters