China forges the world’s largest free trade area. China and other states have signed a “regional, comprehensive partnership”. It comprises 2.2 billion people and around a third of global economic output. A challenge to Europe and the USA.
China forges the world’s largest free trade area
Regardless of the trade conflict with the USA, China has signed the largest free trade agreement in the world with 14 Asia-Pacific countries. After eight years of negotiations, the signing took place on Sunday at the end of the virtual summit of the Southeast Asian community of states Asean in Vietnam’s capital Hanoi.
The “regional, comprehensive economic partnership” or RCEP, as the pact is abbreviated, comprises 2.2 billion people and around a third of global economic output. The agreement reduces tariffs, sets common trade rules and thus also facilitates supply chains. It encompasses trade, services, investment, e-commerce, telecommunications and copyright. RCEP stands for “Regional Comprehensive Economic Partnership”.
In addition to the world’s second largest economy, China and the ten Asean countries Vietnam, Singapore, Indonesia, Malaysia, Thailand, the Philippines, Myanmar, Brunei, Laos and Cambodia, Japan, Australia, South Korea and New Zealand are also participating.
Against the background of the ongoing trade war with the USA, the free trade pact is a great success for the communist leadership in Beijing. According to experts, the agreement will promote economic integration in the Asia-Pacific region and counteract protectionist tendencies. Before the corona crisis, the RCEP countries accounted for 29 percent of the global trade volume – slightly less than the EU with 33 percent. The share of the RCEP community is likely to increase, as experts expect.