By Daniel Llanto

The Philippines is joining the Regional Comprehensive Economic Partnership (RCEP) which was organized under the auspices of China to be the world’s largest trading bloc.

It is touted as a “more modern and high-quality free trade agreement that contains not only the traditional trade deal provisions but terms geared toward the age of digital exchange.”

Trade Sec. Ramon Lopez said RCEP would bring local exporters opportunities to double their shipments while protecting sensitive products such as agricultural goods.

Farmers and workers groups however doubted if the locals are prepared to face foreign competition in the market at a time when consumer and job demands have been weakened by the coronavirus.

China and 14 other countries agreed to set up the world’s largest trading bloc encompassing nearly a third of all economic activity, in a deal many in Asia are hoping will help hasten recovery from the shocks of the pandemic.

The RCEP was signed virtually on the sidelines of the annual summit of the 10-nation Association of Southeast Asian Nations.

Lopez said the accord would bring the already low trade tariffs on trade between member countries still lower, over time, and is less comprehensive than an 11-nation trans-Pacific trade deal that outgoing US President Donald Trump pulled out of shortly after taking office.

The RCEP is expected to boost multilateral exchange among the 15 trading partners at a time the global economy is recovering from the impact of the Covid-19 pandemic.

With 15 countries as initial signatories, RCEP covers more than a third of the world population and roughly a third as well of the global GDP and international trade.

In a statement, Lopez said besides the usual conditions on goods and services trade, the RCEP provides a framework for how its signatories should handle the technical issues of intellectual property, e-commerce, as well as micro, small and medium enterprises.

Apart from the 10-member Association of Southeast Asian Nations, RCEP also includes China, Japan, South Korea, Australia, and New Zealand but not the United States. Officials said the accord leaves the door open for India.

It is not expected to go as far as the European Union in integrating member economies but would build on existing free trade arrangements.

Shortly before the RCEP “special summit” meeting, Japanese Prime Minister Yoshihide Suga said he would firmly convey his government’s support for “broadening a free and fair economic zone, including a possibility of India’s future return to the deal, and hope to gain support from the other countries.”

The accord is also a coup for China, by far the biggest market in the region with more than 1.3 billion people, allowing Beijing to cast itself as a “champion of globalization and multilateral cooperation” and giving it greater influence over rules governing regional trade, said Gareth Leather, senior Asian economist for Capital Economics, in a report.

China’s official Xinhua News Agency quoted Premier Li Keqiang hailing the agreement as a victory against protectionism, in remarks delivered over video link.

“The signing of the RCEP is not only a landmark achievement of East Asian regional cooperation but also a victory of multilateralism and free trade,” Li said.

Now that Trump’s opponent Joe Biden has been declared president-elect, the region is watching to see how US policy on trade and other issues will evolve.

Analysts are skeptical Biden will push to rejoin the trans-Pacific trade pact or to roll back many of the US trade sanctions imposed on China by the Trump administration given widespread frustration with Beijing’s trade and human rights records and accusations of spying and technology theft.

Critics of free trade agreements say they tend to encourage companies to move manufacturing jobs overseas. So, having won over disaffected rust-belt voters in Michigan and western Pennsylvania in the November 3 election, Biden is “not going to squander that by going back into TPP,” Michael Jonathan Green of the Center for Strategic and International Studies said in a web seminar.

The fast-growing and increasingly affluent Southeast Asian market of 650 million people has been hit hard by the pandemic and is urgently seeking fresh drivers for growth.

RCEP originally would have included about 3.6 billion people and encompassed about a third of world trade and global GDP. Minus India, it still covers more than 2 billion people and close to a third of all trade and business activity.