15 Countries of the Asia-Pacific Region Agree to Join a Regional Free-Trade Deal
15 out of 16 countries at the East Asia Summit signed on to the new trade partnership. (Wikimedia Commons)
At the East Asia Summit, 15 countries of the Asia-Pacific region agreed to join an Asia-Pacific trade deal, also known as the Regional Comprehensive Economic Partnership. Some countries that did agree to the partnership include China, Australia, Japan, and South Korea. The only country at the summit in Bangkok that did not sign up was India.
If this trade agreement received approval from India, then it would have encompassed 30 percent of global GDP and half the world’s population. This would make it the largest free-trade agreement to exist. However, India is resisting for a number of reasons, including wanting to protect domestic production, especially that of farm products.
Countries that agreed to the trade deal have condemned India’s decision. Australian Prime Minister Scott Morrison claims, “It’s always been our view, and the view of many who sit around the table, that it is a bigger and better deal with India in it.” Moreover, a joint statement from the leaders of the 15 participating nations states, “RCEP will significantly boost the region’s future growth prospects and contribute positively to the global economy.” Other countries hope that India will join the agreement to counteract China’s influence. Due to India’s massive population and economy, it would be one of the few countries that could sway economic influence away from China in the region.
China generally views the potential deal as a way to further integration of East Asia under Chinese influence, CNBC reports. The trade war with America has slowed down China’s economic growth and has generated a lot of uncertainty for companies.
America has had very little to say about the deal. CNBC reports that Charles Freeman, senior vice president for Asia at the U.S. Chamber of Commerce, claims, “concern is more about the fact that we haven’t come up with a replacement for the TPP strategy.” The U.S. pulled out of the Trans-Pacific Partnership (TPP) in January 2017 after the inauguration of President Donald Trump.
The finalization of the deal is set for 2020. India has not made any further comment on whether they are open to changing their mind in the future. Morrison, however, insists that there is a “very wide, open door” for India if they wish to participate.