Many Member States already have free trade agreements (FTA) between them, but there are restrictions. The RCEP agreement updates the existing ASEAN Plus One free trade agreements, i.e. the agreements between the Association and China, South Korea, Japan, Australia, New Zealand and India. The agreement will complement and build on the WTO Agreement. Once the RCEP agreement enters into force, it will cover a market of 2.2 billion people (nearly 30% of the world`s population), a combined gross domestic product of $26.2 trillion (about 30% of global GDP) and 28% of global trade, based on 2019 figures. Given these latest figures, it will be the largest free trade agreement to date. In addition, the agreement is expected to boost global trade and thus economic growth. Mention should also be made of the political implications of the entry into force of the RCEP Agreement. First, the signing of the agreement comes at a crucial time for the global economy, which has contracted due to the Covid-19 pandemic, and for global economic governance, which is showing signs of fatigue (e.g. B, the WTO Appellate Body Crisis). Despite the above-mentioned fatigue, the signing of the RCEP agreement will support the multilateral trading system. Second, the agreement offers ASEAN the opportunity to strengthen its influence on the Asian continent.
Third, China will benefit from the agreement primarily economically and influentially. Once the agreement enters into force, China will have liberalized access to developing markets, reducing its dependence on domestic consumption. In addition, China sees the adoption of the agreement as an opportunity to establish trade rules on the continent without the influence of the United States. Indeed, this influence diminished in 2017 following the withdrawal of the United States from the negotiations that led to the adoption of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership in 2018. The partnership is a free trade agreement between 11 Pacific countries: Canada, Mexico, Peru, Chile, New Zealand, Australia, Brunei, Singapore, Malaysia, Vietnam and Japan. The RCEP agreement is a testament to ASEAN`s success in placing itself at the centre of its region, even though the major powers tend to throw their full weight behind. ASEAN has also developed an “Indo-Pacific Perspective” which, in the context of growing security and political tensions, highlights the need for the region to remain open, stable, inclusive and rules-based. It is clear that the Indo-Pacific will be the most dynamic region in the world and the center of growth for decades to come.
The region`s success in coping with the COVID-19 pandemic, certainly compared to Europe and the United States, has further reinforced this trend. Now, nearly four years later, and at the end of President Trump`s term, the United States finds itself again when another mega-trade deal is being concluded. Many have commented on the broader implications of these decisions. In fact, an article by the Peterson Institute for International Economics suggested that “the withdrawals [of India and the United States] reflect similar motives in both countries, including nationalist policies on the one hand and fears of losing ground in economic and strategic competition on the other.” The agreement includes 20 chapters on trade in goods, sanitary and phytosanitary measures, standards, technical regulations and conformity assessment procedures, trade policy remedies, trade in services and measures for the temporary free movement of natural persons. .