On November 15, representatives of 15 Asian countries signed a trade deal that is designed to create the world’s largest-ever single market, the “Regional Comprehensive Economic Partnership.” These nations encompass a population even bigger than that of the European Union. The EU remains the world’s deepest trade bloc, that is, it is a more completely unified market than the RCEP, but the RCEP includes an astonishing 30% of the world’s gross production.
The RCEP includes all of the region’s largest economies except for India. It includes China, Japan, South Korea, and Australia. India was part of the talks, but pulled out due to fears the country would be flooded by imports. Nonetheless, the text of the deal includes an “on-ramp,” an invitation for India to join when ready.
The other members are: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, South Korea, Thailand, Vietnam.
The Thing to Know:
Although negotiations toward RCEP have been underway since 2012, they received a kickstart when the United States withdrew from the parallel Trans-Pacific Partnership talks in 2017. Thus, due to the current administration’s “America first” stance as to trade, the United States is neither a member nor does it have a comprehensive trading agreement with either of the globe’s two trading blocks, the EU or the RCEP.
This is a potentially ominous situation for the US, and one the next administration will have to address.