BEIJING, 16 November 2020 (TON): Fifteen Asia-Pacific countries signed the world's biggest free trade deal on Sunday, encompassing nearly a third of all economic activity, seen as a huge coup for China in extending its influence.

The Regional Comprehensive Economic Partnership, or RCEP, includes 10 Southeast Asian economies along with China, Japan, South Korea, New Zealand and Australia, with members accounting for around 30 per cent of global gross domestic product. Officials said the accord leaves the door open for India, which dropped out due to fierce domestic opposition to its market-opening requirements, to rejoin the bloc.

The Free Trade Agreement was signed virtually on Sunday on the sidelines of the annual summit of the 10-nation Association of Southeast Asian Nations (ASEAN).

First proposed in 2012, the deal was finally sealed at the end of a Southeast Asian summit as leaders push to get their economies back on track.

“Under the current global circumstances, the fact the RCEP has been signed after eight years of negotiations brings a ray of light and hope amid the clouds,” said Chinese Premier Li Keqiang after the virtual signing.

 “It clearly shows that multilateralism is the right way, and represents the right direction of the global economy and humanity's progress.”

The deal sends a signal that RCEP countries have chosen “to open our markets instead of resorting to protectionist measures during this difficult time,” he said.

RECP will take already low tariffs on trade between member countries still lower, over time. It will account for 30 percent of the global economy, 30 percent of the global population and reach 2.2 billion consumers, according to Vietnam.

The agreement touches on intellectual property, but environmental protection and labour rights are not part of the pact.

RCEP “will help reduce or remove tariffs on industrial and agricultural products and set out rules for data transmission,” said Luong Hoang Thai, head of the Multilateral Trade Policy Department at Vietnam’s Ministry of Industry and Trade.

The pact will take effect once enough participating countries ratify the agreement domestically within the next two years.

The deal is also seen as a way for China to draft the rules of trade in the region, after the US pull out of  a trade pact,TPP, given the US government facing considerable negative reaction  from many of the domestic audience due to concerns about US job losses to Asian countries.

 Though US multinationals will be able to benefit from RCEP through subsidiaries within member countries, analysts said the deal may cause President-elect Joe Biden to rethink Washington's engagement in the region.