China alongside 14 APAC countries agree on free trade deal

After eight years of negotiations China alongside 14 Asia-Pacific (APAC) countries signed ‘The Regional Comprehensive Economic Partnership (RCEP)’. One one of the biggest free trade deals in history, the deal covers 2.2bn people and 30% of the world’s economic output. 

Those that signed the agreement included: Australia, Japan, New Zealand and South Korea as well as members of the 10-nation Association of Southeast Asian Nations (Asean).

The terms of trade are set out in goods and services, cross-border investment and new rules for increasingly important areas including electronic commerce and intellectual property.

In a joint statement, the country leaders noted that the trade deal would form a crucial part of their plans to recover from COVID-19, the leaders also commented that the deal “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, inclusive, rules-based trade and investment arrangement.”

With the participating companies total combined GDP totalling US$26.2trn in 2019, the deal will encompass almost 28% of the global trade. 

While India pulled out of the negotiations last year due to concerns that it would not be able to protect domestic industry as well as its agricultural sector, the participating companies left the door open for India to join. 

Whilst it is not of the same level as the EU or US-Mexico-Canada Agreement the deal has been marketed as a significant step towards removing trade barriers and extending China influence. 

Li Keqiang, China’s premier, described the deal as “a victory of multilateralism and free trade”, commented the state-run Xinhua news agency.

While Australia’s prime minister, Scott Morrison, noted that the deal would “open up new doors for Australian farmers, businesses and investors.”

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