China gains ground from the US in Asia and leads the world's largest free trade agreement

China gains ground from the US in Asia and leads the world's largest free trade agreement

A total of 15 countries in the Asia-Pacific region have closed this Sunday the creation of the Regional Comprehensive Economic Association (RCEP), a platform that strengthens the influence of Beijing

China gains ground from the US in Asia and leads the world's largest free trade agreement

A total of 15 countries in the Asia-Pacific region have closed this Sunday the creation of the Regional Comprehensive Economic Association (RCEP), the largest free trade agreement in the world, with China at the helm.

The agreement was virtually signed by the leaders in the framework of the summit of leaders of the Association of Southeast Asian Nations (ASEAN) and external partners organized by Vietnam, which this year assumes the rotating presidency of the bloc.

For its entry into force, the RCEP must be ratified by at least six ASEAN members and three of its external partners. The treaty is seen as a platform that benefits Beijing as an economic power in Asia-Pacific , to the detriment of the United States.

goals

The alliance seeks to eliminate tariffs and quotas on 65% of products and other barriers to free trade.

The treaty addresses trade in goods and services, the digital economy, intellectual property, and commercial disputes, among other issues. However, it does not contain regulations on labor rights and environmental impact.

The RCEP began to be negotiated in 2012 within ASEAN with other countries with which the bloc already had free trade agreements (FTAs): Australia, China, South Korea, Japan, India, New Zealand. Last year, India decided to walk out of the deal to protect its market and workers from fears of being inundated with cheaper products, mainly from China. The signatory countries have left the doors open to India if it wants to enter the agreement in the future.

On the ASEAN side, Burma, Brunei, Cambodia, the Philippines, Indonesia, Laos, Malaysia, Singapore, Thailand and Vietnam are represented.

26 trillion dollars

After India's exit, the RCEP was somewhat reduced, although it is estimated that the combined gross domestic product (GDP) of the signatory countries amounts to about 26.2 trillion dollars (22.14 trillion euros), which is equivalent to the 30% of global GDP.

The agreement represents about 28% of world trade and a market of about 2.2 billion people , about 30% of the global population, in the region with the highest economic growth in the world.

The RCEP is often compared to the Comprehensive and Progressive Trans-Pacific Economic Cooperation Agreement (CPTPP), whose measures are more comprehensive but only represent 13.4% of global GDP.

China-US rivalry

The RCEP will increase China's trade opportunities in Asia-Pacific to the detriment of the United States and it is the first multilateral FTA to which Beijing joins , which will be able to increase its exports thanks to the reduction of tariffs.

The RCEP has been welcomed by the region's leaders and some economists as a tool to increase trade and revive the region's economies amid COVID-19. However, some non-governmental organizations have criticized the lack of transparency and that it supposedly benefits large companies more than small producers, mainly in the agricultural sector.

“Governments have given privileged positions to corporate lobbyists at the expense of basic democratic principles,” Sara Elago , a Philippine MP and member of the ASEAN Parliamentarians for Human Rights (APHR), said in a statement. in English).

“There was no serious popular consultation, without the supervision of parliaments and not even the text of the agreement has been available to the public,” Elago added.

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