Asia edges closer to forming world’s biggest economic bloc, which does not include US
Asian trade ministers took another step toward creating what could be the world’s biggest trading bloc yesterday, expressing hope that a deal could be signed by the end of this year.
Ministers from the 16-nation Regional Comprehensive Economic Partnership (RCEP), which includes China, Japan and India but not the United States, met in Tokyo yesterday to try and work out remaining differences.
“The path toward a yearend agreement is now clearer,” said Hiroshige Seko, Japan’s Trade Minister, Bloomberg reported. “As protectionism concerns increase globally, it’s important that the Asian region flies the flag of free trade.”
If ever fully achieved, the partnership would also include the 10 members of the Association of Southeast Asian Nations as well as South Korea, Australia and New Zealand, and cover one third of the world’s economy and almost half its population.
While the pact does not seek to impose higher standards in areas such as labour and environmental protection, like the 11-nation Comprehensive and Progressive Agreement for Trans-Pacific Partnership signed earlier this year, consensus continues to prove elusive.
Major obstacles include India’s requirement that any agreement to reduce tariffs on goods and services should allow for free movement of people, something the country wants for its highly skilled information technology sector.
“There are great challenges to the global trading system at this point in time,” Chan Chun Sing, Singapore’s Trade Minister said yesterday. “It serves as added impetus for us to try and achieve a substantive conclusion to the RCEP process.”
Any further progress on RCEP could put pressure on the US to consider rejoining the TPP, as the US-China trade war continues.
US President Donald Trump’s tariffs on $34 billion (Dh124.90bn) of Chinese goods are scheduled to kick in on July 6, a move that China has vowed to retaliate against.
China yesterday further relaxed restrictions imposed on foreign investment in its free trade zones, in the latest step to fulfill its promise to open up the economy, according to Reuters.
Publishing a revised “negative list” for investment in the zones, the National Development and Reform Commission (NDRC), China’s top economic planner, said curbs in oil and gas exploration, nuclear fuel production and telecommunications would be eased. Foreign investors will no longer have to conduct oil and natural gas exploration and development through joint ventures, and a ban on foreign investment in production of nuclear fuel and radioactive minerals will be lifted, the NDRC said.
Foreign investment limits on breeding of new crop varieties and seed production for wheat and corn will be relaxed, and opening of value-added telecommunications will be expanded from Shanghai’s free trade zone to other zones.
On Thursday, China unveiled a long-anticipated easing of foreign investment curbs on sectors including banking, the automotive, heavy industries and agriculture.