China will win by other means. By adhering to its first multilateral trade agreement, it can present itself as committed to trade liberalization, at a time when America seems relatively disconnected from the region and is still waging a trade war with China. China Premier Li Keqiang welcomed the signing and called RCEP “a victory for multilateralism and free trade” and, lyrically, “a ray of light and hope amid the clouds.” But it is possible that the new “rules of origin” – which officially define where a product comes from – will have the greatest impact. What remains are some agreements on common standards and Australia`s assertive ability to talk more with China than it can through its own one-on-one trade agreement. Within ASEAN, whose virtual RCEP summit was signed, the agreement will be seen as confirmation of its slow and gradual approach to negotiations on everything from trade to the South China Sea. But in the long run, some of its members are also worried about a drift towards a world where China`s economic, political and military world could dominate Asia. That is why many ASEAN members hope that America, under Joe Biden, will once again work more actively with the region. That is why the Obama administration has pursued the TPP so relentlessly. Nevertheless, it seems unlikely that Mr. Biden will attempt to include America in his successor agreement. He has many other battles to do. Asia will continue to be restored by the growing weight of China and by the neglect of America. The China-backed agreement is seen as an alternative to the Trans-Pacific Partnership (TPP), a Washington trade initiative that no longer exists.
Indonesia`s Ministry of Commerce said rcep was the world`s largest regional trade agreement. Benefits of the agreement include the removal of at least 92% of tariffs on goods traded between participating countries, as well as stricter provisions to combat non-tariff measures, as well as improvements in areas such as consumer protection and online personal information, transparency and paperless trade. , according to a statement issued Sunday by Singapore`s Ministry of Trade and Industry. It also includes simplified customs procedures, while at least 65% of the service sectors with high ceilings will be fully open to foreign ownership. The agreement will make exports from participating countries more competitive and create an integrated market for China and regional nations, Said Chan of Singapore. The pact reduces tariffs, opens up the services sector and establishes common rules on trade within the bloc. The agreement covers trade, services, investment, e-commerce, telecommunications and copyright. The RCEP`s accession coincides with another major regional trade pact, the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP). The agreement, signed in 2018 by 11 countries, was originally called the Trans-Pacific Partnership and was to include America to allow Donald Trump to step down after taking office.
When the two agreements were negotiated, U.S. officials would view the RCEP snootily as a substandard pact based on the 20th century model, focusing on tariffs and rudimentary trade facilitation measures, unlike the TPP, which covers areas such as environmental and labour standards and rules for state-owned enterprises.