A trade union created by 15 countries in the Asia-Pacific region, the Comprehensive Regional Economic Partnership (RCEP), has become a challenge for the United States, and they will have to react somehow. This was stated in an interview with CNBC by HSBC Bank Managing Director and Co-Head of Asian Economic Research Frederic Neumann.
The expert named the conclusion of bilateral trade deals with RCEP members as the most likely way of responding to the merger, the main beneficiary of which will be China.
Thus, the United States will be able to penetrate the world’s largest trade agreement. In Neumann’s opinion, a deal with each country is hardly possible, but agreements with a number of them will allow “keeping some doors open.”
The association includes ten members of the Association of Southeast Asian Nations (ASEAN ), China, Japan, South Korea, Australia and New Zealand. Currently, the ratification of the agreement by the participating countries continues.
The Union will become the largest trade association in the world. It will occupy about 30 percent of the world economy and cover 30 percent of the world’s population (2.2 billion people). China, as a major producer, will be able to strengthen its position by receiving preferences in a market of this magnitude.
The Union became an alternative to the Trans-Pacific Partnership (TPP), which was promoted by Barack Obama during his presidency and abandoned by the current head of state Donald Trump . President-elect John Biden said he has a detailed plan of action for RCEP, but promised to make it public only in January.