Fifteen nations in the Asia-Pacific region on Sunday signed the world’s largest free trade agreement.
The Regional Comprehensive Economic Partnership Agreement (RCEP) was signed on the sidelines of the annual summit of the Association of Southeast Asian Nations (ASEAN) held via video link.
The agreement includes 10 ASEAN member states: Malaysia, Indonesia, Vietnam, Thailand, the Philippines, Laos, Cambodia, Myanmar, Singapore and Brunei – along with Australia, China, Japan, New Zealand and South Korea.
Indonesia’s Trade Ministry said RCEP is the largest regional trade agreement in the world.
The pact will take effect once each participating countries ratify the agreement domestically within the next two years.
India was included in the trade pact, but the country withdrew from it last year.
The agreement covers 29.6% of the world’s population, 30.2% of world gross domestic product, around 27.4% of world trade, and 29.8% of world’s Foreign Direct Investment (FDI), according to Indonesian Trade Ministry data.
The ministry said Indonesia had conceived the idea of RCEP in 2011 and it was signed on Sunday after the negotiation process completed.
The trade pact is expected to bring more imported products in each ASEAN country, especially from China.
After the implementation of RCEP, Indonesia is estimated to have an increase in imports of up to $101.9 billion from member countries.
Prior to the implementation of RCEP, Indonesia’s imports from member countries amounted to $100.5 billion.
Indonesia’s exports after RCEP are estimated to only grow by $997.7 million to $91.96 billion.
