Whatâs Going On Here?Leaders from 15 Asia-Pacific countries â whose apartments probably smell of rich mahogany â signed one of the biggest trade agreements in history on Monday. What Does This Mean?The âRegional Comprehensive Economic Partnershipâ (RCEP) is a deal between China, Australia, Japan, South Korea, and plenty more besides, and it covers a third of the worldâs population and economic output. And it wouldâve been bigger still if India â concerned China would throw its weight around â hadnât withdrawn from talks in 2019.
The RCEP will help products move more freely from member to member by cutting the tariffs they have to pay. And it looks like it could be well worth it: economists reckon that by 2030, the deal could add almost $200 billion a year to the global economy. Why Should I Care?Zooming out: Buzzkill.
Asian countries might be forming new alliances, but the US has been leaving them altogether: just look at its withdrawal from the Trans-Pacific Partnership â a major trade deal involving Canada, Mexico, and many RCEP members â back in 2017. Thatâs left the worldâs biggest economy out of two agreements with Asiaâs heavy-hitters, and could see its influence over the worldâs fastest-growing region continue to disappear. All that, while China reduces its dependence on overseas markets and technologyâŠ
The bigger picture: Tick tock...
It took almost a decade to negotiate the RCEP, which might come as some consolation to the UK: itâs been struggling to draft a post-Brexit trade deal with the European Union (EU) in a fraction of that time. The countryâs only replicated about half the trade deals it had with third-party countries when it was part of the EU â and it still has to get the big one with the bloc itself across the line. But the clock is ticking: UK and EU officials need to sign it off by December 31st, when the new rules will come into effect. | 