Australia and New Zealand ratified the Asia-Pacific Regional Comprehensive Economic Partnership Agreement (RCEP), potentially the biggest trade bloc in history, on 2 November 2021. In doing so, they passed the minimum ratification requirement of six ASEAN and three non-ASEAN signatories, which means that RCEP will enter into force on 1 January 2022.
RCEP is a free trade agreement among the Asia-Pacific nations of Australia, Brunei, Cambodia, China, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, South Korea, Thailand, and Vietnam. This is the first time that China has signed up to a regional multilateral trade pact. The deal excludes the US, which withdrew from a rival Asia-Pacific trade pact in 2017.
The 15 member countries account for about 30% of the world’s population and 30% of global GDP (USD26.2 trillion) as of 2020. It is also the first free trade agreement among China, Japan and South Korea, three of the four largest economies in Asia. India indicated in November 2019 that there were several issues preventing it from joining RCEP and has since confirmed it is not able to sign.
The trade pact is expected to eliminate about 90% of the tariffs on imports between its signatories within 20 years of coming into force, and establish common rules for e-commerce, intellectual property, government procurement, competition, and small and medium-sized enterprises. However, it has been criticised for ignoring labour, human rights and environmental sustainability issues.
RCEP was conceived at the 2011 ASEAN Summit in Bali, Indonesia, and negotiations were formally launched during the 2012 ASEAN Summit in Cambodia. The treaty was finally signed on 15 November 2020 at the virtual ASEAN Summit in Vietnam.
RCEP surpasses the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), also known as TPP11, an existing trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, which came into force on 30 December 2018.
TPP11 evolved from the Trans-Pacific Partnership (TPP), which never entered into force due to the withdrawal of the US. Then President Donald Trump pulled the US out of the TPP shortly after he took office.