Fifteen countries spanning the Asia Pacific region have officially inked the Regional Comprehensive Economic Partnership (RCEP) which promises to create a vast free trade network to speed up member countries’ economic growth.
According to a report by Al Jazeera, the RCEP which has been pending approval for eight years has been inked by member countries via an online ceremony on Sunday, November 15. It will come into effect once all participants ratify the pact.
The RCEP is a free-trade deal among the 10-member Association of Southeast Asian Nations (ASEAN) and their trade partners China, Japan, South Korea, Australia, and New Zealand.
It will further lower tariffs on trade among member countries and will account for 30 percent of the global economy, 30 percent of the global population, and reach 2.2 billion customers.
RCEP was officially proposed in 2012, and the talks have dragged on since 2013.
Progress on the talks was especially slow but later gained momentum when US President Donald Trump, who promised to embrace trade protectionism to protect US companies, assumed office in 2017.
In November, the RCEP was brought again to the table but was failed to be signed anew amid India’s last-minute withdrawal over fears that the trade deal will hardly hit its manufacturing sector by cheap made-in-China products, particularly in agriculture and textile sectors.
In addition, India also feared that it would worsen trade deficits that were already exacerbated by previous free-trade agreements.
Members, however, said the doors remained open for India to rejoin the bloc.
“RCEP will soon be ratified by signatory countries and take effect, contributing to the post-COVID pandemic economic recovery,” Vietnam Prime Minister Nguyen Xuan Phuc was quoted as saying in the report. Vietnam hosted the ceremony as the ASEAN chair.
“[RCEP] will help reduce or remove tariffs on industrial and agricultural products and set out rules for data transmission,” said Luong Hoang Thai head of Vietnam’s Ministry of Industry and Trade – Multilateral Trade Policy Department.
For his part, Malaysian Trade Minister Mohamed Azmin Ali said that the deal sent a signal that RCEP countries have chosen “to open our markets instead of resorting to protectionist measures during this difficult time.”
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