KT edit: Rise of Asia as one

The size of a trade deal matters, but what matters more is the fine print that liberalises commerce, truly allowing each member to exploit the opportunities afforded by such pacts. The Regional Comprehensive Economic Partnership, or RCEP, which was signed by leaders of 15 Asia-Pacific nations on Sunday, and hailed as one of the biggest trade deals in history, stops short on multiple counts. The deal commits to fewer tariff restrictions at 90 per cent, compared with 100 per cent under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which came into force in 2018. Half of the 15 members of the RCEP are already members of the CPTPP and 10 countries are members of the Association of Southeast Asian Nations, or Asean. So there is already an existing web of bilateral and multilateral agreements that could offer better terms for liberalised trade than what will be facilitated by the RCEP. Besides, agriculture is largely absent from this deal and the coverage of services is mixed, which is one of the reasons why India bailed out of this agreement last year.

Yet, the RCEP marks a significant step forward for economic integration in Asia, much on the lines of European and North American markets. It is for the first time that China, Japan, and South Korea have come together, a move that would have proven difficult had the countries sought bilateral deals. With the absence of a large economy like India in the mix, it is an opportunity for China to either grow its soft power through collaboration with others or use its singular influence to set standards for regional trade. However it exercises its power will determine the success or failure of this deal. By and large, this is the first step that is getting Asia closer. It needs to be refined further and include more economies to be able to make a significant difference to the world of trade and commerce.