China and 14 Other Countries Sign Deal to Form World’s Largest Trade Bloc
November 17, 2020
China and 14 other countries agreed Sunday to set up the world’s largest trading bloc, encompassing nearly a third of all economic activity, in a deal many in Asia are hoping will help hasten a recovery from the shocks of the pandemic.
The Regional Comprehensive Economic Partnership, or RCEP, was signed virtually on Sunday on the sidelines of the annual summit of the 10-nation Association of Southeast Asian Nations.
The accord will take already low tariffs on trade between member countries still lower, over time, and is less comprehensive than an 11-nation trans-Pacific trade deal that President Donald Trump pulled out of shortly after taking office.
Apart from the 10 ASEAN members, it includes China, Japan, South Korea, Australia and New Zealand, but not the United States. Officials said the accord leaves the door open for India, which dropped out due to fierce domestic opposition to its market-opening requirements, to rejoin the bloc.
The accord is also a coup for China, by far the biggest market in the region with more than 1.3 billion people, allowing Beijing to cast itself as a “champion of globalization and multilateral co-operation” and giving it greater influence over rules governing regional trade, Gareth Leather, senior Asian economist for Capital Economics, said in a report.
The agreement is expected to help China, Japan and South Korea finally reach a trilateral free trade deal after years of struggling to bridge their differences.