Posted on Nov 15, 2020
Fifteen Asia-Pacific economies formed the world’s largest free trade bloc on Sunday, a China-backed deal with the signing of the Regional Comprehensive Economic Partnership (RCEP) at a regional summit in Hanoi, excluding the United States.
RCEP, which comprises of the 10-member Association of Southeast Asian Nations (ASEAN), China, Japan, South Korea, Australia and New Zealand, aims to progressively lower tariffs across many areas, and will position Beijing to shape the region’s trade rules.
The new bloc “will help reduce or remove tariffs on industrial and agricultural products and set out rules for data transmission,” said Luong Hoang Thai, head of the Multilateral Trade Policy Department at Vietnam’s Ministry of Industry and Trade.
It represents the first time China and Japan have agreed a bilateral tariff reduction arrangement.
Thanks to Donald Trump, the United States is now excluded from both RCEP and the successor to the Obama-led Trans-Pacific Partnership (TPP), which Trump withdrew from in 2017, leaving the world’s largest economy out of two trade groups that span the fastest-growing region on earth.
RCEP will account for 30% of the global economy, 30% of the global population and reach 2.2 billion consumers.
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