Asia-Pacific economies have formed the world’s largest free trade bloc on Sunday.
Fifteen Asia-Pacific countries signed the Regional Comprehensive Economic Partnership (RCEP) at a regional summit in Hanoi.
The new group, including many U.S. allies.
The China-backed deal excludes the United States, which had left a rival Asia-Pacific grouping under President Donald Trump.
RCEP groups the 10-member Association of Southeast Asian Nations (ASEAN), China, Japan, South Korea, Australia and New Zealand. It aims in coming years to progressively lower tariffs across many areas.
The deal was signed on the sidelines of an online ASEAN summit held as Asian leaders address tensions in the South China Sea and tackle plans for a post-pandemic economic recovery in a region where U.S.-China rivalry has been rising.
In an unusual ceremony, held virtually because of the coronavirus pandemic, leaders of RCEP countries took turns standing behind their trade ministers who, one by one, signed copies of the agreement, which they then showed triumphantly to the cameras.
“RCEP will soon be ratified by signatory countries and take effect, contributing to the post-COVID pandemic economic recovery,” said Nguyen Xuan Phuc, prime minister of Vietnam, which hosted the ceremony as ASEAN chair.
RCEP will account for 30% of the global economy, 30% of the global population and reach 2.2 billion consumers, Vietnam said.
China’s finance ministry said the new bloc’s promises include eliminating some tariffs within the group, including some immediately and others over 10 years.
There were no details on which products and which countries would see immediate reduction in tariffs.
RCEP “will help reduce or remove tariffs on industrial and agricultural products and set out rules for data transmission,” said Luong Hoang Thai, head of the Multilateral Trade Policy Department at Vietnam’s Ministry of Industry and Trade.
The pact will take effect once enough participating countries ratify the agreement domestically within the next two years, Indonesia’s trade minister said last week.
India pulled out of RCEP talks in November last year, but ASEAN leaders said the door remained open for it to join.