Fifteen Asia-Pacific countries yesterday signed the world’s biggest free-trade deal, seen as a huge coup for China in extending its influence.
The Regional Comprehensive Economic Partnership (RCEP) includes 10 Southeast Asian economies along with Australia, China, Japan, New Zealand and South Korea, with members accounting for about 30 percent of global GDP.
First proposed in 2012, the deal was sealed on the final day of the 37th ASEAN summit hosted virtually by Vietnam, as leaders push to get their economies back on track amid the COVID-19 pandemic.
Photo: EPA-EFE
“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,” Chinese Premier Li Keqiang (李克強) said 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.”
The agreement to lower tariffs and open up the services trade within the bloc does not include the US and is viewed as a Chinese-led alternative to the now-defunct Trans-Pacific Partnership (TPP), which was a Washington trade initiative.
The RCEP “solidifies China’s broader regional geopolitical ambitions around the Belt and Road Initiative,” said Alexander Capri, a trade expert and visiting senior fellow at the National University of Singapore Business School. “It’s sort of a complementary element.”
However, many of the RCEP signatories are battling severe COVID-19 outbreaks and are also hoping that the deal will help mitigate the crippling economic costs of the pandemic.
Indonesia recently tumbled into its first recession in two decades while the Philippine economy shrunk by 11.5 percent year-on-year in the latest quarter.
“COVID has reminded the region of why trade matters and governments are more eager than ever to have positive economic growth,” said Deborah Elms, executive director of the Asian Trade Centre, a Singapore-based consultancy.
Supporters of the trade pact, which covers 2.2 billion people with a combined GDP of US$26.2 trillion, said that it would bolster pandemic-weakened economies by reducing tariffs, strengthening supply chains with common rules of origin and codifying new e-commerce rules.
India pulled out of the agreement last year over concerns about cheap Chinese goods entering the country and was a notable absentee during the virtual signing.
Signatories to the agreement said they hoped New Delhi would rejoin, acknowledging its “strategic importance” to the deal.
The pact should help shrink costs and make life easier for companies by letting them export products anywhere within the bloc without meeting separate requirements for each country.
The agreement touches on intellectual property, but environmental protections and labor rights are not part of the pact.
It is also seen as a way for China to draft the rules of trade in the region, after years of US retreat under President Donald Trump.
Although US multinationals would be able to benefit from RCEP through subsidiaries within member countries, analysts said that the deal might cause US president-elect Joe Biden to rethink Washington’s engagement in the region.
This could see the US eye the potential benefits of joining the TPP’s successor deal, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), IHS Markit Ltd chief Asia-Pacific economist Rajiv Biswas said.
“However, this is not expected to be an immediate priority issue ... given the considerable negative response to the TPP negotiations from many segments of the US electorate due to concerns about US job losses to Asian countries,” he added.
Additional reporting by Bloomberg
INCURSION: After 13 PLA aircraft flew into Taiwan’s ADIZ, the US Department of State said that China should rather ‘engage in meaningful dialogue’ with Taiwan US President Joe Biden’s administration on Saturday urged China to stop placing military pressure on Taiwan, while calling on both sides of the Taiwan Strait to engage in peaceful dialogue. The statement by the US Department of State was issued after 13 Chinese military aircraft flew into Taiwan’s southwest air defense identification zone (ADIZ) on Saturday, the highest number observed in a single day this year, the Ministry of National Defense said. The air force scrambled fighter jets to monitor the Chinese aircraft, issuing radio warnings and mobilizing air defense assets until the planes left the ADIZ. The US “notes
‘INCREASED VIGILANCE’: A source of infection has not yet been found for the latest two cases in a hospital cluster, which should serve as a warning, Chen Shih-chung said A total of 2,991 people associated with a COVID-19 cluster infection at Taoyuan General Hospital have been put under home isolation, after an emergency expanded isolation order was issued on Sunday evening, the Central Epidemic Command Center (CECC) said yesterday. Fifteen people have so far tested positive in the cluster infection. The first case in the cluster (case No. 838) was reported on Jan. 12 — a doctor who treated an infected patient who had returned from the US. Contact tracing for the first 13 cases found connections to case No. 838, said Minister of Health and Welfare Chen Shih-chung (陳時中), who
CHANGE OF GUARD: Hsiao Bi-khim’s attendance at Joe Biden’s inauguration will come as a boost to those in Taiwan who feared that the new US administration would be less friendly than that of Donald Trump to the nation Representative to the US Hsiao Bi-khim (蕭美琴) is to attend US President Joe Biden’s swearing-in ceremony at the US Capitol after she was invited by the US Joint Congressional Committee on Inaugural Ceremonies, a news release issued by the Taipei Economic and Cultural Representative Office (TECRO) in the US said last night. The news came as a surprise as the Ministry of Foreign Affairs had been reticent about the matter, while Chinese Nationalist Party (KMT) members had accused the Democratic Progressive Party administration of hedging its bets on the Republican Party. Asked about when Hsiao received the invitation, the ministry did not
FAMILY UNIT: The CECC warned that the eldest sister of the latest case, who also has COVID-19, visited Taoyuan’s Chungping evening market on Tuesday and Wednesday The Central Epidemic Command Center (CECC) yesterday reported a domestic case of COVID-19, associated with a recent cluster infection at Taoyuan General Hospital, and two imported cases. Minister of Health and Welfare Chen Shih-chung (陳時中), who heads the center, said that the latest case (No. 885) is a woman in her 50s, who is the third daughter of case No. 881, a man in his 90s. The woman is the main caregiver of her elderly father, who had been hospitalized earlier this month and was treated by a nurse (case No. 852) from Monday to Thursday last week, he said, adding that
RSS