When does it take effect, and what are its possible implications for global trade?
In a 2020 world full of surprises, here’s another one: when we were all focused on the COVID-19 third wave, renewed lockdowns, the United States’ election drama, Brexit, trade friction and weighty social issues, out of the blue came the signing of a new trade deal. And this one is no minor footnote; it’s the largest deal on the planet, thus far. When does it take effect, and what are its possible implications for global trade?
The Regional Comprehensive Economic Partnership (RCEP) was signed on Nov.15 on the sidelines of the Association of Southeast Asian Nations (ASEAN) Summit. The signing stands in stark contrast to recent U.S. and global trade rhetoric, which has generally been quite negative on the trade liberalization front.
It seems that 2016 was a watershed year, with the Brexit referendum, the trade-bashing U.S. election and rising global populism. Since then, America pulled away from the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and Brexit negotiations, at a fever pitch this week, have struggled to achieve a domestic and continental consensus. Until the RCEP signing, it was all looking rather bleak for multilateral trade.
Huge is the right word for this one. Not only is it a tide-turner, but it’s now the world’s largest trade bloc, which includes Australia, China, Japan, New Zealand, South Korea and the 10 ASEAN member nations. This covers almost one-third of the global population, about 30% of world GDP and 28% of the planet’s trade activity. It could have been even bigger had India stayed in...
This was excerpted from a 3 December 2020 commentary by Peter G. Hall, Vice-President and Chief Economist, Export Development Canada.