Asia signs on…

From The Australian, by Amanda Hodge:

Thai Prime Minister Prayut Chan-O-Cha beside Prime Minister Scott Morrison and Japan’s former Prime Minister Shinzo Abe at the 2nd Regional Comprehensive Economic Partnership summit (RCEP) in 2018. Picture: AFP

An Asian mega trade pact representing to 30 per cent of all global output is to be signed into force this weekend …amid [China’s] ongoing trade war with the US, and as its neighbours seek to diversify supply chains outside China’s sphere.

All 10 ASEAN nations, plus China, Japan, South Korea, Australia and New Zealand, are ­expected to sign off on the ­Regional Comprehensive Economic Partnership (RCEP) agreement …

China’s determination to drive RCEP into force [is] a response to the Obama administration’s TPP (…Trans-Pacific Partnership), which deliberately shut Beijing out of the world’s then biggest proposed trade deal.

Instead, the US finds itself on the outside of both pacts (Australia is in both)…

The new RCEP bloc… seems also to run counter to recent political rhetoric in Australia, Japan and India around efforts to ….diversify supply chains away from China.

Instead, analysts expect the deal to strengthen trading ties between China, ASEAN and the other members …

Whether that will help ameliorate the escalating bilateral trade and diplomatic tensions between Canberra and Beijing remains to be seen.

… ANU emeritus professor of economics Hal Hill told The Weekend Australian that RCEP was unlikely to change much..

“We have (our own free trade) agreement with China which, in the current environment, appears to be non-functional.”

While some modelling has suggested China could gain as much as $US100bn a year by being in the bloc, and Australia up to $US1bn a year, Professor Hill said RCEP was likely to be of only “marginal benefit”.

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