Introduction
RCEP trade agreement, A historic achievement China and 14 other Asian countries signed a massive trade agreement. After eight years of negotiations, 15 countries formed the world`s largest trading block. Mutually beneficial cooperation in East Asia will help boost global development and economic growth and the cooperation of these states is indispensable in such a process. The states are also committed to the path of solidarity and development.
The deal should remove tariffs and many non-tariff barriers and boost investment in e-commerce and cooperation in areas such as technology. For sure RCEP will make these countries more interdependent and that will increase economic closeness. Similarly, it will be an incentive to avoid inflaming geopolitical tensions and disputes.
Despite the conflicts and rising tensions between countries like China and Australia. Simon Birmingham said “ I welcome the fact that Australia and China have been able to continue as partners in the RCEP agreement. It’s an important sign that Australia is willing to continue to work In regional cooperation and regional economic partnership.
RCEP trade agreement
RCEP will timely and vitally boost a region and world struggling to emerge from the economic damage wreaked by the COVID-19 pandemic. This agreement is for sure a victory for Multilateralism and free trade. The significance for China probably goes way beyond just economic benefits but also in terms of political benefits as well and it’s clear that the East Asian region is going to be more integrated. China has moved towards the direction of a unified market and looking from a geopolitical perspective China`s trading and investment relationships will stabilize the region.
It has been admitted that despite the increasing tensions between Sino-US and their antagonistic relationship China has played very well and successfully engaged the US allies with itself e.g Japan, South Korea, Australia, and New Zealand. The Japanese prime minister said, “Encouraging free trade is even more important now that the Global economy is in a slump and there are signs of countries turning inwards.” According to Japan’s analysts the right direction for Japan.
Asian countries, Japan of course have really taken the last few years to push for multilateral as well as bilateral free trade agreements, it is a signatory to the CPTPP and it also signed a trade agreement with the European Union thus it does bring a very desperate collection of countries together united under the same trade framework agreement and a willingness to cooperate at a time when there is so much insatiability not just in the region and indeed in the world as a result of COVID-19 pandemic.
Ankit Panda he said that “ the RCEP is the reminder that big things are happening and will continue to happen in Asia with or without the United States. The United States is excluded from this deal and President Trump walked away from the Trans-Pacific Partnership thus all the indicators are alarming situations for the United States of America. Walking out from the TPP the United States of America left a huge vacuum for Beijing for which Beijing was very Eager and capable of filling the gap therefore China has ostensibly taken the economic lead and regional economic negotiations.
India hasn’t been a partner to RCEP because India already runs a huge bilateral trade deficit with China that deficit would just go through the roof and that was the main reason India chose not to join. Unfortunately, the Modi government’s trade policy has been going backward.
since 2014 the tariff levels have been raised and they are trying to create this concept of self-sufficient capabilities and development therefore they want to export out of the world but they are not willing to tolerate imports which according to my assessment is not going to work. India is not capable of joining such a big economic agreement because India had really poor infrastructure, poor labor laws, and poor bankruptcy laws and all these were impeding India`s ability to join into global value chains.
This multilateral agreement of this nature has got to be ordering well for economic development if not tomorrow in the short and medium term and according to my assessment, this agreement is for sure significant as it represents a symbolic shift of power away from the United States towards China as the country represents collaborative efforts on the development and strengthening the Asian economy.
