World's largest free trade deal expected to be signed by 15 countries next year

The State Council has encouraged businesses to seize opportunities arising from the planned signing of the Regional Comprehensive Economic Partnership next year as part of measures to stabilize foreign trade and the job market.

Officials and experts have applauded the trade deal, saying it will provide a significant boost to investor confidence, benefiting businesses, workers and consumers, and guide the way for the making of future global trade rules.

The Cabinet said after its executive meeting on Nov 6 that it will encourage countries participating in the RCEP to complete talks on remaining issues and work toward the signing of more high-level free trade agreements with other countries.

Countries involved in the trade deal said in a joint statement after a leaders' meeting on Nov 4 that negotiations among 15 participating countries had been completed, even though India still had significant outstanding issues that remained unresolved. The trade pact is expected to be signed next year, it said.

Premier Li Keqiang said at the executive meeting that the trade agreement will create favorable conditions for China to promote its industrial upgrading and create more jobs.

He called upon Chinese businesses to seize the opportunities from the trade agreement, face the new challenges and actively take part in international cooperation and competition.

The trade agreement among the RCEP economies, even without India, will be the world's largest free trade deal.

The total population of the 15 countries reached 2.2 billion last year, with total GDP exceeding $29 trillion and exports worth $5.6 trillion, according to the Ministry of Commerce.

Wang Shouwen, a vice-minister of commerce and a top trade negotiator, said the pact will be highly significant for China.

"The canceling of tariffs and nontariff barriers means significant cost reductions and strong benefits for Chinese consumers and businesses relying on those economies for materials and components for their products," he said at a news briefing.

The trade agreement, which includes chapters on trade in goods and services, investment, the movement of people, e-commerce, and small and medium-sized enterprises, is expected to offer a significant boost to trade in goods, with the level of opening up even higher than that achieved through the World Trade Organization, he said.

With the rise of unilateralism and protectionism, and mounting downward pressure on the global economy, Wang said the RCEP will provide a significant boost to investor confidence.

Wang Xiaosong, a professor of economics at Renmin University of China, said the RCEP can help China offset the side effects of ongoing trade frictions with the United States and better stabilize its foreign trade in the short term.

"In the long term, the trade pact can promote China's high-level opening-up and further blend in with regional integration efforts," he said.

Researchers from the Asia-Pacific region have hailed the trade pact as a signal that Asia is pushing back against global protectionism.

Academics from the Australian National University wrote in a report that progress on the RCEP showed "Asia has chosen openness over protectionism, regionalism over nationalism, cooperation over confrontation, and solidarity over suspicion".

"They have sent a clear and unambiguous signal to the world: that Asia remains very much open for business," the report said.

They added that the RCEP will contribute significantly to shared prosperity and political security in the Asia-Pacific region by building political certainty and trust.

Tu Xinquan, dean of the China Institute for WTO Studies at the University of International Business and Economics, said the path to the RCEP can be a guide for the making of global trade rules and the upgrading of trade clauses.

"The route taken by the RCEP could give light to guide WTO reforms down the road," he said.

As a fledging regional partnership, he said the RCEP was in no position to replace the WTO, which has 164 members.

"But the RCEP, based on WTO rules, can be seen as a pilot area for the WTO to provide experience for a global trading system," he said.