Australia, Japan, New Zealand and South Korea signed the agreement, along with members of the Association of 10 Southeast Asian Nations (Asean) including Indonesia, Malaysia, the Philippines and Thailand.
The agreement sets out the terms of trade in goods and services, cross-border investments and new rules for increasingly important areas such as e-commerce and intellectual property. The effect on trade in finished goods between Asian countries will be particularly marked, analysts said.
In a joint statement, country leaders said the trade deal would be a crucial part of their plans to recover from the pandemic, which has forced countries around the world to lock down their economies.
The leaders’ statement said the agreement “demonstrates our strong commitment to supporting economic recovery, inclusive development, job creation and strengthening regional supply chains, as well as our support for a trade agreement and open, inclusive and rules-based investment ”.
The combined GDP of the signatories was $ 26.2 billion (£ 20 billion) in 2019, or around 30% of global GDP. The agreement will cover almost 28% of world trade.
It would have covered an additional 1.4 billion people if India had not withdrawn from negotiations last year because it would not be able to protect the domestic industry as well as its agricultural sector.However, the signatories’ statement left the door open for India to join the trade bloc, saying it would be “welcome”.
While it does not offer the same level of integration as the EU or the US-Mexico-Canada agreement, the deal was seen as an important step towards removing trade barriers, as well as l extension of China’s influence.
Chinese Premier Li Keqiang called the deal a “victory for multilateralism and free trade,” according to a report released by the state-run Xinhua news agency on Sunday.
Australian Prime Minister Scott Morrison said the deal “would open new doors for Australian farmers, businesses and investors”.
Trade and investment flows in Asia have grown dramatically over the past decade, a trend that has accelerated in a conflict between the United States and China, in which the two superpowers have imposed tariffs punitive for billions of dollars on their exports.
The RCEP agreement is flexible enough to accommodate the disparate needs of member countries as diverse as Australia, Myanmar, Singapore and Vietnam.
Unlike the CPTPP – the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership – and the EU, it does not set unified standards on labor and the environment and does not commit countries to open up services and other areas. vulnerable in their economy.
The signing of the deal comes shortly after Joe Biden won the US presidential election. Biden is expected to change U.S. foreign policy to take more of the lead on global issues.
Donald Trump withdrew in 2017 from the Trans-Pacific Partnership, an agreement previously seen as a way to limit China’s influence.