New Economic Partnership In the Pacific

Issue 45

11.16.20 - China has just joined economic forces with more than a dozen countries across the Asian Pacific region with the signing of a huge free trade deal nearly a decade in the making.

The Regional Comprehensive Economic Partnership, the name of the new deal, spans 15 countries and 2.2 billion people, or nearly 30% of the world's population, according to a joint statement released by the nations on Sunday, when the deal was signed. Their combined GDP totals roughly $26 trillion and they account for nearly 28% of global trade based on 2019 data.

The deal includes several of the region's heaviest economic hitters aside from China, including Japan, South Korea, New Zealand, Australia, Indonesia, Thailand and Vietnam. The trade agreement was first proposed in 2012 as a way to create one of the world's largest free-trade zones.

The partner countries also noted the importance of the agreement as the world tries to recover from the coronavirus pandemic, saying in a joint statement that the deal "will play an important role in building the region's resilience through inclusive and sustainable post-pandemic economic recovery process."

What is not clear, however, is whether the deal will have an impact on the most important global trading relationship of all: That between the United States and China, who have been fighting over trade and related issues for the last few years.

Source: Wall Street Journal