November 28, 2020

Asia-Pacific countries sign the world’s largest trade agreement


Correspondent in Beijing

Updated:

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More than 2 billion people and a third of the global economy. Going far beyond the European Union and the agreement between the United States, Canada and Mexico, the countries of Asia and the Pacific are already part of the largest trade agreement in the world. It is made up of China, Japan, South Korea, Australia, New Zealand and the ten members of the Association of Southeast Asian Nations (ASEAN): Vietnam, Thailand, Singapore, Indonesia, the Philippines, Malaysia, Myanmar (Burma), Cambodia, Laos and Brunei.

Through videoconference due to the coronavirus restrictions, its leaders have signed this Sunday the call Comprehensive Regional Economic Alliance (RCEP) in parallel with the ASEAN virtual summit. From now on, its 15 countries commit to reduce your customs fees and open your markets and services to others.

Although it is not as politically or economically ambitious as the EU, it does a momentous integration effort among the diverse nations that make up this new Alliance. In these difficult times of the coronavirus, which has brought the Indonesia’s first recession in two decades and a collapse of the Philippine GDP of 11.5%, its members opt for greater trade openness instead of protectionism.

But the most important thing is that it reflects China’s leadership in the region, the most populous and dynamic in the world, compared to the retirada that the US has starred under the four-year term of the defeated President Trump. While the White House abandoned the Trans-Pacific Treaty (TPP), which Obama had championed, and preferred to seek bilateral free trade agreements, the “capicommunist” regime in Beijing promoted this kind of common market for Asia and the Pacific. As a “global factory,” nothing could interest you more than this juicy cake of 650 million potential consumers.

In addition, the agreement will serve to further expand China’s international investments through its «New Silk Roads», or “One Strip, One Route” project, as the propaganda calls it. Fearing an avalanche of cheap Chinese goods and a massive inflow of their capital that would jeopardize their national interests, India finally decided to withdraw from this projectBut your doors are open to get in if you change your mind. If so, this Alliance would add 3.6 billion people and would have a potential that would further evidence the shift of the global economy from West to East.

After eight years of negotiations, the Chinese Prime Minister, Li Keqiang, congratulated itself in a statement of the constitution of this Alliance, which defined as “The most promising free trade agreement in the world” by covering “the largest population and the most diverse countries.” In a veiled response to those who ask to isolate China by blaming it for the pandemic for its initial concealment of information and the lack of transparency of its data, Li insisted that “the multilateralism and free trade they are the right way forward, and they continue as the right direction to promote the growth of the world economy and the progress of Humanity ».

While the Prime Minister of Vietnam, Nguyen Xuan Phuc, declared himself “happy after eight years of complex discussions”, the head of Trade of Malaysia, Mohamed Azmin Ali, acknowledged that the agreement had cost “blood, sweat and tears”. For his part, the Prime Minister of Japan, Yoshihide Suga, advocated continuing “to expand a free and fair trade zone, including the possibility of the future return of India, and to win the support of other countries”, in clear allusion to your American partner.

Although the agreement will facilitate the commercial integration of these 15 countries and will raise many barriers, it does not come to harmonize environmental or labor policies. For this reason, its critics fear a “Chinese colonization” of the poorest countries in Southeast Asia, where its presence is already notable.

Now it remains to be seen whether the new US president, Joe biden, recovers the role lost by Trump in Asia, both in the Trans-Pacific Treaty and in the development of the Indo-Pacific corridor that, from India to Oceania via Japan and Southeast Asia, aims to counteract the rise of China. But, of course, first it will be necessary to see if Trump lets Biden occupy the Oval Office.

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