15 Asian nations led by China are expected to sign the world’s largest free trade agreement in the weekend. The Regional Comprehensive Economic Partnership (RCEP) is expected to surpass the African Continental Free Trade Area (AfCFTA) in both size and value.
This was disclosed by Bloomberg in a report on Thursday.
The Regional Comprehensive Economic Partnership will have a potential market of 2.2 billion with a combined GDP of $26.2 trillion, making it the biggest by market size.
The trade agreement will also include Oceanic countries like Australia and New Zealand. Also, just like the AfCFTA, the agreement aims to reduce tariffs and improve supply chains between Asian nations. However, India withdrew from negotiations in 2019.
“Its passage may be a disadvantage to some U.S. companies and other multinationals outside the zone, particularly after President Donald Trump withdrew from talks on a separate Asia-Pacific trade deal – formerly known as the Trans-Pacific Partnership,” Bloomberg said.
“Even though RCEP isn’t as far-reaching as the TPP, its implementation could make it harder for U.S. businesses to compete with a Chinese-backed partnership that encompasses 2.2 billion people and a combined GDP of about $26 trillion.
“The deal’s advance illustrates how Trump’s move to withdraw from the TPP – now known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership has diminished America’s ability to counterbalance China’s economic clout with its neighbors. The deal will be formally announced this weekend in the ASEAN conference virtually hosted by Vietnam.”
What you should know
The African Continental Free Trade Area (AfCFTA) is the biggest free trade agreement in the world right now with a potential market of 1.2 billion people and a combined gross domestic product of $2.5 trillion.
Nigeria announced that it has ratified Nigeria’s membership to the African Continental Free Trade Area (AfCFTA), ahead of the December 5, 2020 deadline. The agreement goes into effect from the 1st of January 2021.
