The world’s largest trading bloc will not include the U.S.
China, Japan and 13 other countries signed the Regional Comprehensive Economic Partnership on Sunday, uniting countries with 30% of the world population for a landmark deal. The pact had been in the works since 2012 with “blood, sweat and tears,” according to Malaysia trade minister Mohamed Azmin Ali, but a need for a coronavirus pandemic recovery quickened work on the finishing touches.
The RCEP statement said it “will play an important role in building the region’s resilience through inclusive and sustainable post-pandemic economic recovery process” and is a signal that the group will “open our markets instead of resort to protectionist measures during this difficult time.”
Tariffs and quotas will be eliminated for 65% of the goods traded in the region, which also includes South Korea, Australia, New Zealand, Indonesia, Thailand and Vietnam. India withdrew to protect its farmers.
Fox Business reported that the accord is less comprehensive than an 11-nation trade deal President Donald Trump pulled out of shortly after taking office. Trump launched an “America First” policy for trade deals four years ago.
The RCEP accounts for 25% of the world’s 2019 gross domestic product, but highlights China and its 1.3 billion people as a “champion of globalization and multilateral cooperation,” Capital Economics senior Asian economist Gareth Leather wrote in a report. The global economic center keeps pushing to the east and this deal could help soothe trade tension between China and Australia.
But with China’s human rights history, trade record, technology spying accusations and the threat of U.S. companies moving overseas, don’t expect the U.S. to partner up in that region in this presidency or the next.