Regional Comprehensive Economic Partnership (RCEP)
The Regional Comprehensive Economic Partnership (RCEP) is a free trade agreement (FTA) that will create the world's largest trading bloc and mark a significant achievement for China as it battles the U.S. for influence and economic supremacy in the Asia-Pacific region. The Regional Comprehensive Economic Partnership (RCEP) is a free trade agreement (FTA) that will create the world's largest trading bloc and mark a significant achievement for China as it battles the U.S. for influence and economic supremacy in the Asia-Pacific region. Concerned that China was poised to write the trading rules for Asia in the 21st century, U.S. President Barack Obama led the creation of the rival Trans-Pacific Partnership (TPP), itself an enormous and even more comprehensive trade agreement than RCEP. Initially, it includes the 10 member countries of the Association of Southeast Asian Nations (ASEAN) and five Asia-Pacific countries with whom ASEAN has existing FTAs: New Zealand South Korea India had also planned to join the deal but pulled out in November 2019. 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.
What Is the Regional Comprehensive Economic Partnership (RCEP)?
The Regional Comprehensive Economic Partnership (RCEP) is a free trade agreement (FTA) that will create the world's largest trading bloc and mark 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, representing nearly a third of the world's gross domestic product, signed the agreement on Nov. 15, 2020, via teleconference.
Understanding the Regional Comprehensive Economic Partnership (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. Initially, it includes the 10 member countries of the Association of Southeast Asian Nations (ASEAN) and five Asia-Pacific countries with whom ASEAN has existing FTAs:
India had also planned to join the deal but pulled out in November 2019.
While not as comprehensive as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), RCEP will lower or eliminate tariffs on a broad range of goods and services and establish 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.
The Regional Comprehensive Economic Partnership (RCEP) Offers a Win for China
Concerned that China was poised to write the trading rules for Asia in the 21st century, U.S. President Barack Obama led the creation of the rival Trans-Pacific Partnership (TPP), itself an enormous and even more comprehensive trade agreement than RCEP. TPP originally included 12 nations from Asia-Pacific and the Americas but not China. However, U.S. President Donald Trump withdrew from the TPP shortly after taking office in early 2017.
The remaining members of the TPP pushed ahead and renamed the agreement the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Trade ministers from all 11 remaining nations have signed it and seven have ratified it. But Trump's withdrawal significantly diminished its impact and U.S. influence, and the conclusion of RCEP negotiations give China an edge in setting the terms of trade in the Asia-Pacific.
The Regional Comprehensive Economic Partnership (RCEP) and CPTPP Members
While the two trade blocs were designed with competing interests in mind, seven countries in Asia-Pacific are parties to both of them:
Related terms:
Association of Southeast Asian Nations (ASEAN)
ASEAN is an organization of 10 countries in southeast Asia that promote cultural, economic, and political development in the region. read more
Asia-Pacific Economic Cooperation (APEC)
Asia-Pacific Economic Cooperation (APEC) is a 21-member economic forum that promotes free trade and sustainable development in Pacific Rim economies. read more
Brexit (British Exit from the European Union)
Brexit refers to the U.K.'s withdrawal from the European Union after voting to do so in a June 2016 referendum. read more
Free Trade Agreement (FTA)
A free trade agreement reduces barriers to imports and exports between countries by eliminating all or most tariffs, quotas, subsidies, and prohibitions. read more
Free Trade Area Defintion
Free trade areas are groups of countries which sign free trade agreements to facilitate trade and reduce trade barriers. read more
Pacific Rim
The Pacific Rim refers to the geographic area surrounding the Pacific Ocean characterized by the heavy presence of a bulk of the world's shipping. read more
Tiger Economy
A tiger economy is a nickname given to several booming economies in Southeast Asia. It can also refer to outperforming economies in other regions. read more
Trans-Pacific Partnership (TPP)
The Trans-pacific Partnership (TPP) is a proposed free trade agreement among 11 Pacific Rim economies. read more