SINGAPORE: Fifteen Asia-Pacific nations signed a mega free trade deal on Sunday (Nov 15) as they concluded an annual summit of Southeast Asian leaders and their regional partners, held virtually this year due to the COVID-19 pandemic.
The Regional Comprehensive Economic Partnership (RCEP) is the world’s biggest trade agreement. It will progressively lower tariffs across many areas in the coming years.
The pact, which was first proposed in 2012, loops in 10 ASEAN economies along with China, Japan, South Korea, New Zealand and Australia.
They make up nearly a third of the world’s population and account for 29 per cent of global gross domestic product.
“After eight years of negotiating with blood, sweat and tears, we have finally come to the moment where we will seal the RCEP Agreement this Sunday,” Malaysia’s trade minister Mohamed Azmin Ali had said ahead of the summit.
Prime Minister Lee Hsien Loong, who led Singapore’s delegation, on Sunday hailed the signing of the RCEP as a “major milestone” and congratulated the 15 participating countries.
“We have reached a major milestone of signing this agreement today. It has taken us eight years, 46 negotiating meetings and 19 ministerial meetings to get here. I am very grateful for the tireless efforts of ministers and negotiators from all participating countries who have worked so hard during the process.
“The RCEP is a major step forward for the world, at a time when multilateralism is losing ground and global growth is slowing,” said Mr Lee.
Now, he added, “the hard work of implementing the agreement and encouraging our businesses to take full advantage of it begins”.
“We have all made difficult trade-offs to advance the negotiations. And we will have to work hard to persuade our citizens that the RCEP will benefit them,” said Mr Lee.
“But I have no doubt that the RCEP is a plus for all of us, and will help stem the tide against globalisation.
“Singapore looks forward to working with participating countries on the timely implementation of this momentous agreement,” the Prime Minister added.
The RCEP will come into force when six ASEAN countries and three non-ASEAN countries have ratified it.
In his remarks following the signing, Singapore’s Trade and Industry Minister Chan Chun Sing described the signing as a “result of the hard work of many stakeholders over the last eight years”.
“RCEP’s diversity shows how free and open trade and investment is in the common interest of all economies, regardless of our development stages,” said Mr Chan.
“And our determination to carry this through in this challenging year shows an awareness that our prosperity and success are interlinked. Deeper integration and a more interdependent world will ultimately lead to a safer and more prosperous world,” he added.
Mr Chan also spoke of ASEAN and its “critical role” in this journey, specifically how its “leadership as a trusted and neutral group” has enabled partners to come together “in an unprecedented way” and cooperate under the RCEP umbrella.
“Without the RCEP, it would have been much harder for some of us to do bilateral or trilateral trade deals,” he said.
The four-day ASEAN summit included meetings between Southeast Asian leaders and their counterparts from China, Japan and South Korea in the ASEAN Plus Three Summit, as well as the East Asia Summit and RCEP Summit.
The 15 RCEP countries agreed on the terms of the deal last year, setting up the path for it to be signed during the summit.
India pulled out of talks last year, worried that the elimination of tariffs would open its markets to a flood of imports that could harm local producers. Other countries have said the door remains open for New Delhi.
In his speech, Mr Lee said he joins fellow RCEP countries “in hoping that India too, will be able to come on board at some point so that the participation in the RCEP will fully reflect the emerging patterns of integration and regional cooperation in Asia”.
Mr Chan also said that without India, the RCEP is “still a very significant agreement”.
Given the existing economic links between India and RCEP countries, investors “will also take into account India’s economy” when investing in the region, he added.
Regarding China, Mr Chan said the RCEP will allow many of the Chinese companies to invest in the regional markets, while the other countries will also benefit from having access to the “huge” Chinese market.
The RCEP will also help attract investors beyond the region as the Chinese and regional markets will be seen as an “integrated market”, and exports to the rest of the world will become “much more competitive”, added Mr Chan.
Moving forward, the minister said greater global integration and economic recovery through leveraging comparative advantages will be on the agenda at the upcoming Asia-Pacific Economic Cooperation (APEC) and Group of Twenty (G20) conferences.
When asked about cooperation with the United States, which recently saw a close presidential election won by Joe Biden, Mr Chan said: “We’ll be in close consultation with the US after they settle down.”
Editor’s note: This story has been updated to correct information from Reuters related to when RCEP takes effect following ratification by signatory countries.