Asia creates the world’s largest global trading block 

The Regional Comprehensive Economic Partnership (RCEP) potentially includes more than 3Bn people or 45% of the world’s population, with a combined GDP of about US$21.3Tn, accounting for approximately 40% of world trade.

RCEP’s formation was sped up in direct response to President Trump withdrawing USA from the regional Trans-Pacific Partnership (TPP).

The combined potential GDP of RCEP members, particularly in China, India and Indonesia, could see total GDP in RCEP grow to over US$100Tn by 2050, roughly double the project size of TPP economies (source: RCEP).

The agreement, signed on 15 November 2020, is now the largest single trade agreement and may become even bigger if still undecided India signs up.

Under the agreement, the participating countries agree to phase out tariffs over the next 20 years. RCEP is seen by many observers as preparation and recognition of China’s development from a low labour cost manufacturing base to a soon-to-be largely middle income, middle-class population consuming manufactured goods made in RCEP countries and assembled (tariff-free) and sold in China.

"Under the current global circumstances, the fact the RCEP agreement has been signed after eight years of negotiations brings a ray of light and hope amid the clouds," said Chinese Premier Li Keqiang.

Countries in RCEP and GDP in US$M

1. Australia 1,482,282
2. Brunei 11,991
3. Cambodia 24,307
4. China 13,118,689
5. India 2,971,165
6. Indonesia 1,092,138
7. Japan 5,063,129
8. Laos 18,674
9. Malaysia 340,923
10. Myanmar 74,002
11. New Zealand 215,172
12. Philippines 357,792
13. Singapore 316,872
14. Republic of Korea 1,597,392
15. Thailand 466,623
16. Vietnam 234,688