Monday, November 16, 2020

Bye America! Asia Joins Forms of World's Largest Trading Bloc

 On Sunday, fifteen Asia Pacific economies signed a China-backed agreement to form the world's largest free trade bloc, accounting for nearly a third of the global economy.

The agreement, which is seen as providing an opportunity for China to further expand its influence in the overseas region, is known as the Overseas Comprehensive Economic Cooperation (RCEP) and comprises 10 Southeast Asian countries, as well as South Korea, China, Japan, Australia and New Zealand.

It also marked the first combined three major powers of East Asia, namely China, Japan and South Korea, in a free trade agreement.

The latest collaboration is expected to eliminate various tariffs on imports of member countries within 20 years, which includes allotments of intellectual property, telecommunications, financial services, e-commerce and professional services.

RCEP members account for almost one third of the world's population and account for 29% of the global economy. The new free trade bloc will be bigger than the US-Mexico-Canada and European Union (EU) Agreement.

This agreement does not include the United States which withdrew from the Asia Pacific trade agreement in 2017, namely the Trans-Pacific Partnership (TPP), after Donald Trump assumed the presidency.

India also pulled out of the RCEP negotiations in November last year following doubts about low tariffs to deter local spenders. However, ASEAN leaders say the door is still open to accepting India in the first place.