Regional Comprehensive Economic Partnership Forms Big Trade Bloc
After eight years of talks, China and 14 other countries have agreed to form the world's largest free trade bloc, signing the Regional Comprehensive
Economic Partnership or RCEP, which accounts for nearly 30% of the global economy and 30% of the global population. The new agreement will help hasten the recovery from the shocks of the coronavirus pandemic and eliminate or reduce already existing tariffs for many goods including steel products. On November 15, the RCEP agreement was signed during the online annual summit of the 10-nation ASEAN. The deal combined ASEAN countries Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam into a single multilateral pact with Australia, China, Japan, New Zealand and South Korea.
Tariffs will be eliminated mainly for goods that already qualify for duty-free treatment under existing free trade agreements. However, the countries will be able to keep tariffs for imports in sectors they regard as especially important or sensitive. Another important fact about the RCEP is the rules of origin criteria.
However, it could take some time, because the pact will take effect once enough participating countries ratify the agreement domestically. According to some analysts it could even take around two years.