The statement by the Heads of State and Government states that the agreement demonstrates “our strong commitment to supporting economic recovery, inclusive development, job creation and strengthening regional supply chains, as well as our support for an open, rules-based open trade and investment agreement.” For some trade experts, this new agreement shows that the rest of the world will not wait for the United States. The European Union has also conducted trade negotiations at an aggressive pace. While other countries are signing new agreements, U.S. exporters may gradually lose ground. Das stressed, however, that India remains interested in deepening trade relations in Southeast Asia. Biden said he would wait for new trade deals to be negotiated. It wants to focus its energy on the pandemic, economic recovery and investments in U.S. manufacturing and technology. The agreement, the Comprehensive Regional Economic Partnership (R.C.E.P., is limited in scope. Yet it has considerable symbolic weight. The pact covers more humanity – 2.2 billion people – than any previous regional free trade agreement, and could help consolidate China`s image as the dominant economic power in its neighborhood. In a joint statement, the countries` heads of state and government said the trade agreement would be a decisive part of their post-pandemic recovery plans that forced countries around the world to block their economies. The RCEP, often imprecisely described as “china-led,” is a triumph of ASEAN`s diplomacy of middle power.
The value of a major East Asian trade agreement has long been recognized, but neither China nor Japan, the region`s largest economies, have been politically acceptable as architects for the project. The impasse was resolved in 2012 by an ASEAN-brokered agreement, which included India, Australia and New Zealand as members and tasked ASEAN with negotiating the agreement. Without such an “ASEAN centrality,” the RCEP would never have been created. In 2019, the total GDP of the signatories was $26.2 billion (20 Tn), or about 30% of the world`s GDP. The agreement will cover nearly 28% of world trade. The EU`s chief negotiator, Michel Barnier, says the UK cannot have a Canadian-style trade deal with the Bloc, prompting a furious reaction from Downing Street. If the UK were to act in accordance with WTO rules, tariffs would apply to most of the products that British companies send to the EU. This would make British goods more expensive and more difficult to sell in Europe. The UK could also do so for EU products if it so wishes. Japan stated that the agreement applied to a regime allowing the accumulation of rules of origin, which means that products made up of components manufactured by the free trade parties can benefit from preferential tariffs.