On November 15th, fifteen Asian and Pacific countries virtually signed the Regional Comprehensive Economic Partnership agreement, or RCEP. The agreement creates the world’s largest trading bloc, covering 2.2 billion people and including nearly a third of global economic activity. The deal, which was first proposed in 2012, will lower tariffs on trade among the signatories and open services trade.
RCEP includes the 10 ASEAN countries plus China, Japan, South Korea, Australia and New Zealand, but not the United States. India dropped out because of the concerns it would not be able to protect domestic industry as well as its agricultural sector. The agreement is also expected to help China, Japan and South Korea finally reach a trilateral free trade deal after years of struggling to bridge their differences.
Analysts see the agreement as a huge advantage for China in extending its influence, but the deal is not likely to have the same level of integration as the EU. Chinese premier Li Keqiang described the deal as “a victory of multilateralism and free trade.”