Nov 04, 2019 / 10:43

World’s biggest trade deal RCEP set to be signed in Vietnam in 2020

The Hanoitimes - The 16-nation trade deal, which includes major economies such as India and China, would make up nearly 50% of the world’s population, about 30% of global GDP and 28% of total trade turnover.

The world’s biggest trade deal Regional Comprehensive Economic Partnership (RCEP) would likely be signed in 2020 in Vietnam, according to a draft statement by Southeast Asian leaders obtained by AFP.

 ASEAN leaders and India's Prime Minister Narendra Modi (6th from left) pose for a group photo during the 16th ASEAN-India Summit in Bangkok on November 3, 2019, on the sidelines of the 35th Association of Southeast Asian Nations (ASEAN) Summit. Photo by Lillian Suwanrumpha/AFP.

The 16-nation trade deal, which includes major economies such as India and China, would make up nearly 50% of the world’s population, about 30% of global GDP and 28% of total trade turnover.

“Most market access negotiations have been completed and the few outstanding bilateral issues will be resolved by February 2020,” said the draft statement.

Negotiations have sputtered for several years, but the statement said the text of all 20 chapters was now complete "pending the resolution of one" member, believed to be India. But it said all members were "committed to sign the RCEP" next year in Vietnam, which will take over the ASEAN chair.

New Delhi is worried its small businesses will be hard hit by any flood of cheap Chinese goods. Indian Prime Minister Narendra Modi repeated his country's concerns during talks with ASEAN leaders on Sunday.

Similar to the Comprehensive and Progressive Trans – Pacific Partnership (CPTPP), the RCEP is a multilateral free trade framework but at a larger scale, consisting of China, Japan, India, South Korea, Australia, New Zealand and the 10 members of ASEAN. 

Beijing sees RCEP as a central pillar of its trade strategy for its Asian neighborhood, and it is backed by the leaders of ASEAN and who represent a 650 million market.

Concluding the deal has been made more pressing by the brutal tit-for-tat trade war with the US, which has chipped back at growth in China, the world's second-largest economy.

Nguyen Thi Thu Trang, director of the WTO Center and Integration under the Vietnam Chamber of Commerce and Industry (VCCI), previously said the deal would continue to boost Vietnam’s exports, as the consumer base of RCEP is considered not too demanding, except for countries like Japan, Australia or New Zealand, while Vietnam could expect strong demand for some of its key export staples, including tropical fruits and processed foods, among others.

“However, there remain concerns over the deal,” Trang said, adding some countries are Vietnam’s direct trade competitors with higher competitiveness, while a large number of member countries means a major differentiation of requirements for goods quality.

“A shift and even disruption in trade flow should not be ruled out when the deal becomes effective, especially between countries with no free trade agreements,” Trang continued. 

Pham Tuan Anh, deputy head of the International Cooperation Department under the Ministry of Finance (MoF), Vietnamese enterprises should prepare for more competition in such fields as communications, logistics, while the investment and business environments are set to become more transparent and competitive.