World’s Largest Free Trade-deal "RCEP" to be signed
The China-backed trade agreement is set to be signed by China, 10 ASEAN nations, S.Korea, Japan, Australia, and New Zealand this weekend on the occasion of the ASEAN Summit. The Regional Comprehensive Economic Partnership or RCEP will comprise 15 countries, 2.2 billion people, and a combined GDP of $26.2 trillion, nearly a third of global GDP. Beijing’s decade-long quest for regional integration aims at reduced tariff, strengthening the supply chain with common rules of origin, and a common set of rules for e-commerce and intellectual property. The fundamentals of the RCEP are built on the previously existing liberal trade agreements between the member nations, vastly reducing the import-export procedures thus an easy movement of investments, goods, and other services.
RCEP was hatched in 2012 to counter the growing U.S. involvement in the region under Trans-Pacific Partnership (TPP), which was making strong progress with its 12 constituent members. With Trump’s withdrawal from the TPP, RCEP gained momentum. With the RCEP agreement in motion, it seems it will be centered around the likes of China, being the largest exporter and importer, and will have a greater advantage which is a concern for many countries among those 15. Now the question is when President-Elect Biden will resume his office, will there be any revival of the old TPP, or significant changes be made in CP-TPP which is 5 times smaller than RCEP in terms of trade volume?
India lately withdrew from the RCEP citing the dis-advantage it has for its small and medium domestic producers and the primary sector. Although this decision was political, studies showed that there will be no significant improvement in India’s Export with this treaty and may hamper the BOP of the country. The rising standard of Intellectual property is another issue for India’s withdrawal.