The world’s biggest free trade deal could be signed next year. The deal, called the Regional Comprehensive Economic Partnership (RCEP), involves the 10 countries from the Association of Southeast Asian Nations (ASEAN) bloc and five of its major trading partners: Australia, China, Japan, New Zealand and South Korea. The final text with details of the trade agreement will go through legal reviews before being signed and released.
RCEP was launched to boost commerce across the group by lowering tariffs, standardizing customs rules and procedures, and widening market access. It will progressively reduce tariffs on many products and eliminate the need to fill out separate paperwork for each export destination within the bloc. The agreement does not require changes to labor rights laws, environmental practices, or intellectual property rights in member states
Together, the 15 countries planning to sign the deal make up close to one-third of the world population and global gross domestic product. That’s considerably bigger than other regional trading blocs, such as the European Union and the United States-Mexico-Canada Agreement, or USMCA. Right now, USMCA is being held up by negotiations and the European Union is facing the exit of Britain from the bloc.
The East Asia Forum commented on the agreement last week, saying, “In signing RCEP, Asia has chosen openness over protectionism, regionalism over nationalism, cooperation over confrontation, and solidarity over suspicion. They have sent a clear and unambiguous signal to the world: that Asia remains very much open for business, committed to the open regionalism that has seen East Asia’s share of global GDP soar from 15 percent to 30 percent since 1980, while South Asia’s remains stubbornly has not budged, stuck around 3 percent to 4 percent.”
Sixteen countries started negotiating RCEP in 2013, but India has since declined to participate. Prime Minister Modhi said the deal would damage the domestic economy. India is Asia’s third-largest economy and a large consumer market.