China and 14 other nations from across the Asia-Pacifc region have signed off on one of the largest trade deals in history, creating the world's biggest trading bloc and covering almost a third of global economic activity.
The Regional Comprehensive Economic Partnership (RCEP) was signed Sunday, November 15th at the annual meeting of the ten-nation Association of Southeast Asian Nations (Asean) in Vietnam, though the signing ceremony itself was completed via video link due to the coronavirus pandemic.
In addition to China and the ten members of Asean, the deal has been confirmed by Australia, Japan, New Zealand and South Korea.
While the deal is not as complex or wide-ranging as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and will not reduce tariffs by as much, analysts have suggested the sheer size of the RCEP in terms of economic clout could make it potentially more significant.
In 2019, the combined GDP of the 15 signatories was $26.2 trillion, equating to around 30 per cent of global GDP. The new deal will cover nearly 28 per cent of global trade, making it bigger than both the US-Mexico-Canada trade deal and the EU.
The RCEP is also seen by many as an opportunity for China to increase its influence in Asia-Pacific, as this is the first time it has signed up to a multilateral regional trade arrangement.
Chinese state-run news agency Xinhua reported the country's premier Li Keqiang as saying: "This is not only a monumental achievement in East Asian regional cooperation, but more important, a victory of multilateralism and free trade."
Other leaders also welcomed the deal, which will eliminate tariffs on a range of products over the next 20 years, as well as set out new rule of origin standards for the participants.
Australian prime minister Scott Morrison said: "This agreement covers the fastest growing region in the world and, as RCEP economies continue to develop and their middle classes grow, it will open up new doors for Australian farmers, businesses and investors."
The RCEP could have had an even bigger impact had India signed up to it, but the south Asian nation withdrew from negotiations over concerns it would not be able to protect its domestic sectors. However, the signatories have said the door remains open for India to join at a later date if it reconsiders.