The World’s Largest Trade Deal to be Signed in 2020
The Regional Comprehensive Economic Partnership (RCEP) is set to be signed by Australia, China, Japan, South Korea, New Zealand, and all countries from the Association of Southeast Asian Nations (ASEAN) in 2020. The purpose of the RCEP is to incentivize trade between ASEAN and its main trading partners by reducing tariffs and other trade barriers. The RCEP has been in the works for 6 years now and now it is ready to be finalized soon, making it the largest trade bloc in the world. The catalyst that seemingly forced the RCEP from theoretical into reality has been the U.S.-China trade war. The United States global impact on trade, especially in the Asian region, has revealed to the members of the RCEP that in order to combat western influence in eastern trading, an agreement must be reached soon.
Furthermore by signing the RCEP, ASEAN and its trading partners are attempting to establish the virtue of globalism within the Asian economies over protectionism. After President Trump signed executive legislation removing the United States from the TPP, the 15 countries associated with the RCEP decided that protectionism posed a negative detriment to the health on individual and global economies, thus opting for a deal that intertwines the economic duties of all countries involved. If executed correctly, the RCEP could facilitate an increase in cheaper and more efficient trade on a scale that the world has yet to see and mitigate the massive influence American politics and economics maintain on Asian economies.
Keith Knutsson of Integrale Advisors commented that, “With the signing of the RCEP in 2020, we could very well witness an unprecedented growth in trading and lack of western influence in Asian markets.”