The Regional Comprehensive Economic Partnership (RCEP), which entered into force on Saturday, January 1, has 15 members, including China, Japan, South Korea and many other Asian countries, but it does not include either the United States or the United States. 'India.
It is the largest free trade agreement in the world.
The agreement removes tariffs on thousands of products, simplifies trade procedures and provides mutual benefits to member countries.
It also covers issues such as electronic commerce, intellectual property and government procurement.
The RCEP, however, has less stringent labor and environmental requirements than those expected by member countries of the European Union and which are met by the Trans-Pacific Partnership, concluded with many of the same countries, with the exception of China.
Experts say RCEP is expected to boost trade in the region by 2 percent, or $ 42 billion, through increased trade and trade diversion facilitated by changing tariff rules.
The deal is a masterstroke for China, which is by far the region's largest market with more than 1.3 billion people.
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Complex relationships
“Beijing has experienced difficulties in the region over the years for different reasons,” said Oliver Farry, correspondent for France 24 in Hong Kong. "China has not really been successful in making its point in non-geopolitical terms, and although some past economic initiatives like the 'New Silk Road' are touted, these have been less successful than This led to the conclusion of a trade agreement of unprecedented scope with countries in the Asia-Pacific region with which China has rather complex relations, notably Japan, South Korea, Vietnam and Australia. "
Two years of the Covid-19 pandemic, isolation, border closures, mandatory quarantine and other restrictions have cost millions of people in the region their jobs while disrupting supply chains around the world, especially in terms of manufacturing and shipping.
Countries facing soaring cases of the new Omicron variant are slowing the reopening of their borders to international travel.
Regional economies contracted 1.5% in 2020 and then rebounded, with the Asian Development Bank forecasting 7% growth this year, boosted by weak figures from the previous year.
But the upturn should run out of steam next year, with growth slowing to 5.3%.
The pandemic has also hampered the ratification of the trade agreement for some countries.
China was the first to ratify the RCEP in April, after it was signed in November 2020 at a virtual meeting bringing together the leaders of its 15 member countries.
Indonesia, Malaysia and the Philippines have yet to do so, but they are expected to ratify it soon.
Burma, whose government was overthrown by the military on February 1, 2021, has ratified it, but this is not yet accepted by other members.
Beijing is ready for this new trade bloc: China has already fulfilled 701 "binding obligations" for the RCEP, Chinese Vice Minister of Commerce Ren Hongbin said Thursday.
"RCEP's trade deal is slowly changing the game."
"RCEP is very important in creating new development models and a crucial step in opening up our economy," Ren Hongbin said in a press conference transcript available on the Commerce Ministry website.
He said the bloc would bring the economies of member countries closer together and "greatly boost confidence in economic recovery from the pandemic."
A boon for developing countries
RCEP, launched by China, is aimed at developing countries because it facilitates trade in agricultural and manufactured goods, which constitute the bulk of their exports.
It says little, however, about trade in services and business access to the economies of other countries, topics of particular interest to the United States and other developed countries.
Originally, the RCEP was to include some 3.6 billion people.
Without India, which has withdrawn, it still concerns more than 2 billion and covers almost a third of all commercial activities.
The United States-Mexico-Canada Agreement, or USMCA, a revamped version of the North American Free Trade Agreement under Donald Trump, covers slightly less economic activity, but less than a tenth of the population global.
The EU and the Comprehensive and Progressive Trans-Pacific Partnership, a revised version of an agreement rejected by former President Donald Trump, are also smaller.
The RCEP comprises six of the 11 remaining members of the CPTPP.
Like any trade agreement, RCEP has its critics.
In a recent legislative hearing broadcast on YouTube, Indonesian government officials urged lawmakers to adopt RCEP.
But Elly Rachmat Yasin, a member of a committee responsible for agriculture, environment, forests and the navy, questioned Indonesia's Minister of Commerce, Muhammad Lutfi, on the merits of the involvement of the Indonesia in the deal, noting that India has pulled out largely over fears Chinese imports will invade its markets.
Muhammad Lutfi responded that the RCEP would help boost exports and attract additional inflows of up to $ 1.7 billion in foreign investment by 2040.
Philippine Commerce Secretary Ramon Lopez says he expects lawmakers to ratify the pact in January, after running out of time to do so in December, when the government was busy dealing with the consequences of a typhoon that hit the country on December 16.
Some 375 people have died and hundreds of thousands more remain homeless.
The trade bloc is expected to create many jobs in the service sector, a big draw for a country like the Philippines, which relies heavily on remittances from migrant workers.
"RCEP will increase GDP and reduce the incidence of poverty. It will further open market access for our exports and expand the supply of inputs needed to improve the competitiveness of our manufacturing sector and our exporters," said Ramon Lopez.
"There is no reason not to ratify RCEP," he said, adding that not to do so would be "catastrophic" since investors would likely favor countries in the trade bloc.
Adapted from the English by Lou Romeo. The original version can be found here.
(FRANCE 24 with AP)
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