The largest trade deal in history has been signed, with 15 countries including Australia agreeing to the pact. The Regional Comprehensive Economic Partnership (RCEP), which has taken eight years to negotiate, surpasses the Trans-Pacific Partnership (TPP) in scale after the United States pulled out of that agreement.
The countries involved are Australia, China, Japan, South Korea, New Zealand and the ten members of ASEAN, including Indonesia and Vietnam.
Leaders agreed to terms on the RCEP at the Association of South-East Asian Nations (ASEAN) summit in Bangkok last year. The signing on the dotted line took place late on Sunday during this year’s virtual meeting.
Backed by China, the deal is seen as a coup for Beijing in extending its influence across the region and marks its dominance in Asian trade. Australia again clashed with China over its military activities in the South China Sea during the ASEAN meeting. Australia’s trading relationship with China has been strained in recent months – see our previous report on 04 November 2020.
India withdrew last year over concerns about cheap Chinese goods entering the country, though it can join at a later date if it chooses. Even without India, RCEP will still be the world’s largest free trade agreement ever made.
Australia will work towards ratification of the Agreement in 2021, in a manner consistent with our treaty-making procedures. These steps include tabling of the Agreement and associated National Interest Analysis in the Australian Parliament, and consideration of RCEP by the Joint Standing Committee on Treaties.
Much of the focus of RCEP is on standardising trade rules across countries, making it easier for people to do business. It will enter into force 60 days after six ASEAN Member States and three non-ASEAN Member States have ratified the Agreement.
Colless Young is a licensed Customs Broker and International Freight Forwarder based in Brisbane. We offer professional advice on your trade, transport and shipping activities at all Australian ports and airports. Our services cover every aspect of logistics by air and sea cargo, including exports and clearance of import cargo through customs and quarantine, warehousing and trucking.
