HANOI (Reuters) – Fifteen economies in the Asia-Pacific region formed the world’s largest free trade bloc on Sunday, a deal backed by China that excludes the United States.
The signing of the Comprehensive Regional Economic Partnership (RCEP) at a regional summit in Hanoi is a further blow to the group pushed by former US President Barack Obama, whose successor, Donald Trump, withdrew in 2017.
Amid questions about Washington’s engagement in Asia, RCEP could solidify China’s position as an economic partner of Southeast Asia, Japan and Korea, putting the world’s second-largest economy in position to shape the region’s trade rules.
RCEP could help Beijing reduce its dependence on foreign markets and technology, said Iris Pang, chief economist for mainland China at ING.
RCEP brings together the ten members of the Association of Southeast Asian Nations (ASEAN), China, Japan, South Korea, Australia and New Zealand. It aims to reduce customs tariffs in many sectors.
RCEP will represent 30% of the global economy, 30% of the world’s population and reach 2.2 billion consumers, Vietnam said on Sunday.
RCEP “will help reduce or eliminate tariffs on industrial and agricultural products and define rules for data transmission,” said Luong Hoang Thai, head of the multilateral trade policy department at Vietnam’s ministry of industry and commerce.
The pact will enter into force once a sufficient number of participating countries ratify it nationally within the next two years, Indonesia’s trade minister said last week.
India withdrew from RCEP negotiations in November last year, but ASEAN leaders said the door remains open to membership.
(Khanh Vu and Phuong Nguyen, James Pearson, Liz Lee, Gayatri Suroyo, Bernadette Christina Munthe, Hyonhee Shin, Neil Jerome Morales, Kaori Kaneko, Kirsty Needham, Gabriel Crossley; French version Camille Raynaud)