The world’s biggest trade agreement Regional Comprehensive Economic Partnership (RCEP) took place recently. The agreement witnessed participation from 15 countries including China. India, however, pulled out at the last moment.
The signing of agreement is scheduled for next year. This is so to facilitate free trade between members of the Association of Southeast Asian Nations or ASEAN. It also comprises New Zealand, Japan, Australia, and South Korea.
Tariffs to Lower Progressively in Many Parts of the Bloc
Exact details of the agreement are yet to be made public; nevertheless, it is likely to lessen tariffs progressively across many parts of the region. The advocates of the agreement opine that companies will be able to export the same product at any part of the bloc. Export of goods would not need to need separate requirements and complete different procedures and paperwork for each of the countries of the bloc.
Deborah Elms from the Asian Trade Centre states that for a producer of goods, it is a massive market. She further states that at present, what is lacking is the presence of substantial amount of Asian trade for Asian final markets, This agreement sets that up. This deal provides an impetus for the setting up of supply chains by the companies within the area irrespective of their regions of export. RCEP also discusses about the need to protect intellectual properties and services.
However, RCEP holds less importance as a trade agreement in comparison to Comprehensive and Progressive Agreement for Trans-Pacific Partnership. This partnership is among 11 countries of the Asia Pacific and does not harmonize or cover much. This is an agreement between the nations as opposed to boards. For certain nations, various sensitive issues such as agriculture not put forth. Furthermore, the partnership does not come with the provision of liberalization of state organization. It also does not safeguard the environment and workers from any damage.