There is going to be a big trade agreement in Asia. The trade agreement will be signed on November 15, the last day of the ongoing ASEAN summit. Analysts believe the deal could change the balance of the world trade system. In the eyes of BBC Bangla, this is ‘China’s queue in world trade’.
The trade agreement, dubbed the Regional Comprehensive Economic Partnership (RCEP) or Regional Integrated Economic Partnership, is astounding িক one-third of the world’s population and 29 percent of GDP. It is larger than the United States-Mexico-Canada or the European Union. As a result, it will be the largest free trade zone in the world. This news was found by BBC sources.
The Association of Southeast Asian Nations or 10 ASEAN countries, China, Japan, South Korea, Australia and New Zealand are signing the agreement. Initially, India was also involved in the negotiation process of the agreement. But India withdrew from negotiations last year, fearing that its inclusion in the agreement would reduce tariffs and hurt local production.
The RCEP aims to lift various tariffs on its imports in the next 20 years. It will also cover intellectual property, telecommunications, financial services, e-commerce and other professional services.
But the idea is that the rules of origin of the World Trade Organization could have the biggest impact on the agreement. Many of the treaty countries have already signed their own free trade agreements. But it again has its limitations. The use of these existing free trade agreements, subject to the RCEP, can be complicated to use, such as if a product made in Indonesia has Australian parts, it could be subject to tariffs in the ASEAN Free Trade Area.
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On the other hand, under RCEP, any member country will get the same status. This may inspire companies from member countries to look for suppliers in the region.
