The United States is staying out of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP), while Asian countries such as Japan and China lead both global trade arrangements.
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The CPTPP has already been signed by more than half of its member countries and will enter into force on December 30.
For its part, the RCEP is still under negotiations, but like the CPTPP, it is of no interest for president Donald Trump, whose actions, such as sparking a trade war with China, have lead the world’s top economies to seek new partnerships on trade and economic issues, sometimes with the U.S. at the margin of negotiations, or entirely absent from them.
The RCEP is an agreement proposed by China which is still under negotiations.
Its member countries are China, Japan, Australia, South Korea and New Zealand.
When it comes into force, it will be the biggest free trade agreement in history, in terms of population and the percentage of global Gross Domestic Product (GDP) of the countries party to it.
The agreement was set to be signed during the last Association of South East Asian States (ASEAN) summit.
However, China remains “positive” that the agreement will move forward, a sentiment shared by “Japan and India.”
These last two countries often clash with China on the international stage, however, they are both moved to participate in the trade deal at the behest of its initial promoter because they agree that U.S. leadership is creating “uncertainty” in matters related to the world economy and global trade, according to Ding Yifan, deputy director of China US Focus.
The CPTPP, which started as the Trans Pacific Partnership (TPP) and was sponsored by Barack Obama’s administration, was seen by some analysts as a way to take away influence from China over some of its neighbors through the creation of a pacific trade partnership between Australia, Japan, Malaysia, and the United States, Mexico, and Canada, among others.
Trump took the United States out of the deal at the beginning of his administration.
Currently, the CPTPP has 11 signatory countries from Asia, Australia, South America, Europe, and North America, and seven ratifying countries from those same regions.
The partnership is set to increase earnings of member countries by approximately 0.87 percent by 2030 according to the World Bank.
Among the countries which will benefit the most by reduction in tariffs are Vietnam by 2.8 and Mexico by 0.13, according to El Pais.
For its part, the RCEP, which would involve nearly 50 percent of the world’s population, could generate approximately double the earnings of the CPTPP for its member countries.
China would greatly benefit from greatly improving access of its products to countries such as India and Japan, according to an analyst from the Rajaratnam School of International Relations, Singapore.