The Big Number: $26.2 trillion
That’s the combined GDP of the 15 countries set to sign the world’s biggest free trade deal via video conference this Sunday. Known as the Regional Comprehensive Economic Partnership (RCEP), the agreement took eight years of negotiations and will include the 10 members of the Association of Southeast Asian Nations (ASEAN), along with Australia, China, Japan, Korea, and New Zealand. These countries together account for about a third of both the world’s GDP and population.
India withdrew in November last year over fears of being flooded with cheap consumer goods from China, but it is being granted special permission to join whenever it chooses to under a clause.
The timing of the China-led RCEP being sealed just before the next U.S. administration is no coincidence. An expert who advises the Chinese government on trade told the South China Morning Post the Biden Administration is likely to rejoin the CPTPP, and “if the RCEP negotiations are not handled well, that would provide incentive for a lot of countries to shift to CPTPP.” Too many abbreviations? The chart below should help.
CPTPP or the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a free trade agreement between 11 countries that emerged after the U.S. rejected the Trans-Pacific Partnership (TPP) in 2017. President Obama had promoted TPP as a means to limit China’s influence in global trade and it is possibly still seen as a threat to the Asian economy’s interests.
