Almost 10 years after it was mooted, the world's largest trade pact - the Regional Comprehensive Economic Partnership (RCEP) - was signed at the weekend. Involving the 10 members of Asean, plus Australia, China, Japan, South Korea and New Zealand, the RCEP covers nearly one-third of the world's population and contributes almost 30 per cent of its gross domestic product. Negotiations began in earnest in 2012 but hit several speed bumps along the way, the largest one being India's withdrawal from talks in November last year after citing concerns that it would be swamped by cheap imports. Although other countries will not be allowed to join the RCEP for a certain period of time after it takes effect, the door remains open for India to participate again.
The economic fallout globally from the Covid-19 pandemic was a significant motivating factor in finalising the deal, given the benefits of its cuts to tariffs and trade barriers. The RCEP will improve market access for goods and services, attracting foreign companies keen on entering a more integrated Asean market. It aims to establish a common set of rules to facilitate trade among participating countries, something which is important for deepening transnational supply chains, and it also covers non-traditional areas which are not in some existing agreements such as e-commerce and intellectual property.