WHAT IS RCEP?

  • The Regional Comprehensive Economic Partnership (RCEP) is a free trade agreement (FTA) that will create the world’s largest trading bloc.

It marks a significant achievement for China as it battles the U.S. for influence and economic supremacy in the Asia-Pacific region.

  • The 15 Asia-Pacific nations poised to sign RCEP in 2020 account for nearly a third of the world’s gross domestic product.

KEY TAKEAWAYS

  • China is the key member of RCEP, which will give it the upper hand in influencing the rules of trade in Asia-Pacific.
  • The TPP became the much less influential CPTPP after President Donald Trump withdrew from the agreement in 2017.

UNDERSTANDING RCEP

Backed by China, RCEP was envisaged as a way to bolster trading ties among nations across Asia-Pacific and promote trade and economic growth in the region.

MEMBER NATIONS

Initially, it will include the 10 member countries of the Association of Southeast Asian Nations (ASEAN) and five Asia-Pacific countries with whom Asean has existing FTAs:

  • Australia
  • China
  • Japan
  • New Zealand
  • South Korea

India had also planned to join the deal but pulled out in November 2019.

  • RCEP will lower or eliminate tariffs on a broad range of goods and services .
  • It establishes rules on such things as investment, competition, and intellectual property, including digital copyright.
  • Unlike the CPTPP, RCEP does not include provisions on labor and environmental standards.