China, Japan, South Korea, Australia, New Zealand and the ASEAN countries signed a Regional Comprehensive Economic Partnership (RCEP) agreement. Its ratification will lead to the world’s largest free trade area – although the agreement provides for the preservation of selective trade restrictions and is generally less advanced than the Comprehensive and Progressive Trans-Pacific Partnership, initiated by the US, which subsequently withdrawn from it.
During the online summit of the Association of Southeast Asian Nations (ASEAN), ten countries of the association – Vietnam, Thailand, Myanmar, Laos, Cambodia, Malaysia, Singapore, Indonesia, Brunei and the Philippines – as well as five partner countries – China, Japan, South Korea, Australia and New Zealand – Signed the Regional Comprehensive Economic Partnership (RCEP). The ratification of the document will lead to the creation of the world’s largest free trade zone (the participating countries together account for about a third of the world economy). At the same time, India withdrew from the RCEP negotiations a year ago, as reported, due to demands to lower duties on the import of agricultural products and fears of an influx of cheap Chinese goods.
Recall that the RCEP, since the beginning of negotiations in 2012, was viewed as a Chinese “counterbalance” to the Trans-Pacific Partnership, which until the victory of Donald Trump in the 2016 presidential election was one of the two main foreign trade initiatives of the United States (as a result, the agreement was signed without the United States in 2018 as Comprehensive and Progressive Trans-Pacific Partnership, CPTPP).
Premier of the State Council of the People’s Republic of China Li Keqiang said that the conclusion of an agreement on the establishment of the RCEP “is not only a breakthrough in the economic integration of East Asian countries, but also a victory for multilateralism and free trade.”
The document provides for a reduction in duties on most categories of goods (only 92% of items), but with various reservations – for example, Japan will retain duties on the import of certain agricultural products. The agreement establishes rules in the field of intellectual property and e-commerce, and also provides for an increase in the share of possible foreign participation for companies providing services in 50 sectors (including telecom, finance, professional services). At the same time, unlike CPTPP, this agreement does not include requirements for the environmental friendliness of goods and the protection of workers’ rights.
Recall that Russia, as a member of the EAEU, already has a trade agreement with Vietnam (it entered into force in October 2016), as well as with Singapore (signed a year ago), negotiations with India are continuing. In addition, an agreement on trade and economic cooperation was concluded with China, but it does not provide for a reduction in tariffs – imports of energy resources around the world are almost free of duties, while on other items, in particular, on agricultural products, China very selectively opens its market, protecting its primarily not by duties, but by phytosanitary requirements.
The Ministry of Economy of the Russian Federation is still studying the final text of the agreement, but according to preliminary estimates, it is less ambitious than, for example, the conditions for the functioning of the free trade zone within the Trans-Pacific Partnership, Deputy Minister of Economy Vladimir Ilyichev told Kommersant.
“This will not affect our agreements with Vietnam in the sense that the EAEU-Vietnam agreement will continue to operate in full. At the same time, the entry into force of the RCEP will open up new opportunities for access to the markets of the signatory states for Russian businesses represented in the Vietnamese market, ”the official added.