By SAT News Desk
MELBOURNE, 15 November: Fifteen Indo-Pacific countries including China and Australia signed the world’s largest trade-pact virtually on Sunday (15 Nov 2020) on the sidelines of the annual ASEAN summit. The agreement will take effect when signing countries ratify it within two years. The absence of the US, the world’s biggest economy, and India, the second biggest populated country remains a sore point for the emerging trading bloc.
The agreement is seen as a big victory for China, as it projects it as the biggest champion of globalization says a senior Asian economist for the Capital Economics quoted by Al Jazeera. The US had pulled out of the deal after Trump took over the Presidency and India quit later. It now remains to be seen what steps the Biden Presidency will take in this regard.
India’s coming back to the RCEP also remains clouded in mystery with the Modi government’s concerns over protecting the Indian market of cheap Chinese goods and dairy products from Australia and New Zealand.
Australia’s Prime Minister Scott Morrison says the signing of this long-awaited agreement signaled our region’s shared commitment to open trade and investment, despite the challenges of COVID-19.
“Our trade policy is all about supporting Australian jobs, boosting export opportunities, and ensuring an open region with even stronger supply chains. RCEP builds on our trade successes and is good news for Australian businesses,” Prime Minister Morrison said.
“With one in five Australian jobs reliant on trade, the RCEP Agreement will be crucial as Australia and the region begin to rebuild from the COVID‑19 pandemic.
“This agreement covers the fastest-growing region in the world and, as RCEP economies continue to develop and their middle classes grow, it will open up new doors for Australian farmers, businesses, and investors.”
A media release from the Australian PM’s office says:
“When finalized, the main benefits for Australia will be:
– A new single set of rules and procedures for accessing preferential tariffs in any of the 15 RCEP markets
– New scope for trade in services throughout the region including across telecommunications, professional and financial services.
– Improved mechanisms for tackling non-tariff barriers including in areas such as customs procedures, quarantine, and technical standards.
– Greater investment certainty for businesses.
– Rules on e-commerce to make it easier for businesses to trade online.
– A common set of rules on intellectual property.
– Agreed rules of origin that will increase the competitiveness of Australian inputs into regional production chains.
The countries which have signed the agreement are Australia, New Zealand, Japan, China, Vietnam, Cambodia, Indonesia, Laos, Myanmar, the Philippines, Thailand, Brunei, Singapore, Korea, and Malaysia.
Meanwhile, just days ahead of the signing of the treaty, a press conference hosted by the Public Services International (PSI) on November 12, bringing together voices that raised issues relating to the RCEP. Kate Lappin, regional secretary of PSI’s Asia-Pacific arm, outlining the concerns of the trade unions, pointed out that the “main concern that the unions have about these trade agreements for decades now, is that they reflect the interests of multinational corporations.”
“They clearly are to the benefit of foreign investors, not even domestic businesses. In doing that, they ensure a race to the bottom for wages and (work) conditions.”
Trade Justice Pilipinas, a group dedicated towards trade justice for global south countries, criticized the deal being pushed through during the COVID-19 pandemic and questioned the wisdom of the leaders pursuing a neoliberal trade model at a time when the world is questioning its efficacy.
“RCEP will further prop up a broken economic model that we need to radically transform in favor of one that is more resilient,” reads their statement. “The COVID-19 pandemic and the global economic slowdown should have prompted a pause in these negotiations instead of the acceleration that happened. States should be made accountable for committing to new obligations under this agreement that would be detrimental to the public interest. This is an agreement that will be forged by governments without the consent of the people.”
