* RCEP will be the largest trading block in the world
* The agreement, backed by China, does not include the United States
* RCEP represents 30% of global GDP and population
* Pact which will enter into force over the next few years (add description, quote in paragraphs 8 and 9)
By Khanh Vu and Phuong Nguyen
HANOI, Nov.15 (Reuters) – Fifteen Asia-Pacific economies formed the world‘s largest free trade bloc on Sunday, a China-backed deal that excludes the United States, which had left a rival group of Asia-Pacific under President Donald Trump.
The signing of the Regional Comprehensive Economic Partnership (RCEP) at a regional summit in Hanoi, is a new blow for the group carried by former US President Barack Obama, whose successor Trump left in 2017.
Amid questions about Washington’s engagement in Asia, RCEP may more firmly consolidate China’s position as an economic partner of Southeast Asia, Japan and Korea, putting the second largest world economy in a better position to shape the region’s trade rules.
The United States is absent from RCEP and the successor to the Obama-led Trans-Pacific Partnership (TPP), leaving the world‘s largest economy on two trading groups that span the world‘s fastest growing region.
In contrast, RCEP could help Beijing reduce its dependence on foreign markets and technology, a change accelerated by a growing break with Washington, said Iris Pang, ING chief economist for Greater China. .
RCEP brings together the 10 members of the Association of Southeast Asian Nations (ASEAN), China, Japan, South Korea, Australia and New Zealand. In the coming years, it aims to gradually reduce tariffs in many areas.
The deal was signed on the sidelines of an ASEAN online summit held as Asian leaders tackle tensions in the South China Sea and grapple with post-pandemic economic recovery plans in one region where the rivalry between the United States and China is increasing. unusual ceremony, held virtually due to the coronavirus pandemic, the leaders of the RCEP countries took turns behind their trade ministers who, one by one, signed copies of the agreement, which they then triumphantly showed to the cameras.
“The RCEP will soon be ratified by the signatory countries and enter into force, contributing to the post-COVID pandemic economic recovery,” said Nguyen Xuan Phuc, Prime Minister of Vietnam, who hosted the ceremony as President of ASEAN .
RCEP will account for 30% of the global economy, 30% of the world‘s population and reach 2.2 billion consumers, Vietnam said.
Despite being outside the RCEP and having been in the administration that propelled the TPP, President-elect Joe Biden – Obama’s vice president – is unlikely to join the TPP anytime soon, Analysts said, as his government will need to prioritize dealing with the COVID-19 outbreak. at home.
“I’m not sure there will be a lot of focus on trade in general, including efforts to join the ‘TPP successor group’, during the first year or so, as there will be such a focus on COVID relief, “Vice President Charles Freeman said this month the Asian President of the American Chamber of Commerce.
RCEP “will help reduce or remove tariffs on industrial and agricultural products and establish rules for data transmission,” said Luong Hoang Thai, head of the Multilateral Trade Policy Department at the Ministry of Industry and of Vietnam Trade.
The pact will enter into force once a sufficient number of participating countries have ratified the agreement nationally over the next two years, Indonesia’s trade minister said last week.
For China, the new group, including many American allies, is a boon resulting in large part from Trump’s withdrawal from the TPP, ING’s Pang said.
India pulled out of RCEP talks in November last year, but ASEAN leaders said the door remains open to membership.