China's President Xi Jinping Photograph:( Reuters )
The RCEP is seen as a China-backed alternative to the US-led Comprehensive and Progressive Agreement for Trans-Pacific Partnership
China ratified the Regional Cooperation Economic Partnership (RCEP) on Tuesday three months ahead of schedule and asked other members to follow suit.
Chinese Commerce Minister Wang Wentao said, “The sooner the agreement enters into force, the sooner the people of the member countries will benefit.”
The agreement is between ten countries from the Association of Southeast Asian Nations (ASEAN), China, Japan, South Korea, Australia and New Zealand.
The RCEP pact makes it easier for Chinese companies to run regional supply chains more efficiently. In return, ASEAN countries get better access to China, South Korea and Japan.
The pact needs to be ratified by all countries, which may take time and has different levels of tariff reductions for each country and product. That means labour-intensive countries may get more imports than exports, particularly during the pandemic, over the short-term.
The RCEP is seen as a China-backed alternative to the US-led Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and is touted as the world's largest free trade agreement.
The CPTPP was central to former President Barack Obama's strategic pivot to Asia, linking 11 countries across the Pacific. Trump withdrew the United States from the pact in 2017 before it was signed.
To discourage its partners in the agreement from working with China, the Biden administration is expected to quickly state its intent to rejoin the CPTPP.
The United States is asserting its presence in Asia-Pacific with alternate arrangements, including "the quad" - an informal grouping of Australia, India and Japan and Washington - to counter China's political, commercial and military influence in the region.