Regional Comprehensive Economic Partnership (RCEP) trade pact will be signed today. The pack is backed by China as they look to increase their dominance in the Asian markets. After eight years of wrangling over the details, the trade pact — the world’s largest in terms of GDP, say analysts — will be signed on Sunday.
It was launched in 2012. It is a trade pact between 10 member countries of the ASEAN, along with China, Japan, South Korea, Australia and New Zealand. India had been due to sign but pulled out last year.
Its aim is to lower tariffs, open up trade in services and promote investment to help emerging economies catch up with the rest of the world. It also touches on intellectual property, but will not cover environmental protections and labor rights.
“A key priority area for further RCEP negotiations is likely to be e-commerce,” said Rajiv Biswas, Asia Pacific chief economist at global business consultancy IHS Markit.
However, experts believe that RCEP is not as extensive as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
It “is not a fully completed, fully rationalized agreement,” said Alexander Capri, a trade expert at the National University of Singapore Business School.
“The problem with RCEP is that you have 15 incredibly diverse countries at different stages of development and with completely internal priorities,” he added.
India withdrew from the pact last year as it did not want cheap Chinese goods to enter the Indian markets and kill the domestic trade. However, if India wishes to join, it can do so in future.