The devil is in the details of the world's largest trade agreement

The new "comprehensive regional economic partnership" agreement includes countries that house nearly a third of the planet's population and economic output, making the Singapore Ministry of Trade describe it as "the largest free trade agreement in the world so far."

Yesterday, Zhao Lijian, a spokesman for the Chinese Foreign Ministry, the largest signatory to the agreement, said it "represents a strong impetus for regional economic recovery and global economic growth" and "shows that all parties are committed to multilateralism and free trade."

The agreement also includes the 10 member states of the Association of Southeast Asian Nations (ASEAN), in addition to Australia, Japan, New Zealand and South Korea.

A statement issued by the signatory governments affirmed that the agreement, which was proposed for the first time at a summit hosted by Cambodia in 2012 for the Asia-Pacific countries, "shows a strong commitment to support economic recovery, inclusive development, job creation and strengthening regional supply chains."

Others, however, were more cautious, noting that most of the 15 countries had already signed countless similar but smaller agreements with each other, including far-reaching arrangements such as the Free Trade Agreement signed between ASEAN and China a decade ago.

The United Nations Conference on Trade and Development (UNCTAD) stated that the agreement “can help recover economic growth after the Corona pandemic, enhance intra-regional trade and investment relations in light of global trade tensions, and provide a framework for further regional cooperation.”

The 510-page deal, which took eight years to negotiate, is annotated with details of the customs duties taking up thousands of other pages - more than 2,000 of them pertaining to South Korea alone.

Deborah Elms, executive director of the Asian Trade Center, a Singapore-based research organization, believes that "the agreement will take some time to unravel its details," explaining that "governments can get creative to hide important details within the various provisions."

Despite the complexities of the agreement, Elms described it nonetheless as "potentially more ambitious in general."

India, the second-largest country by population and the world's fifth-largest GDP, pulled out of pact talks a year ago due to concerns that its companies were not ready for foreign competition.

Greg Pauling, a researcher in the Southeast Asia Program at the Center for Strategic and International Studies, predicted on Twitter that the agreement would have "a marginal impact on trade, (especially) without India. Most of the parties already have similar or even better agreements with each other." .

The United States, which has the largest economy in the Asia-Pacific region, is not a party to the agreement.

Barack Obama, President of the United States at the time, had participated in the 2012 summit when the agreement was first proposed, but his country was leading at that time negotiations on a separate trade agreement known as the Trans-Pacific Partnership.

The United States later withdrew from the agreement after the election of President Donald Trump in 2016.

Although the ASEAN Association was the first to propose the "Comprehensive Regional Economic Partnership" agreement, the economic strength of China and the absence of the United States from both the agreement as well as from the "Trans-Pacific Partnership" agreement has occurred. Speculation that China will increasingly dominate regional trade has increased, coinciding with expectations that China will press ahead with the United States' position as the world's largest economy before the middle of the century.

"It is a great loss for the United States to remain mesmerized and in a state of discontent as others go ahead with setting economic rules," Pauling said.

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