Editorial | World’s biggest free-trade deal has to be welcomed

A key building block of what will be the world’s biggest free-trade area has fallen into place with approval of Japan’s ratification by the upper house of parliament in Tokyo. This follows a green light from the lower house for joining the Regional Comprehensive Economic Partnership and comes a day after China called for the deal to be ratified to boost the Asia-Pacific region’s economy.

Japan’s ratification will clear a hurdle to the regional scope and inclusiveness of the China-backed RCEP, which includes the 10 members of the Association of Southeast Asian Nations, plus China, Japan, South Korea, Australia and New Zealand. By eliminating tariffs on 91 per cent of goods, the RCEP will create a free-trade zone covering nearly a third of the global economy, trade and population.

China has already ratified the deal, which is aimed at taking effect early next year, subject to ratification by six of the Asean members and three of the non-Asean members. Coincidentally, the RCEP will mark the first deal of its kind involving China, Japan and South Korea, while they continue trying to negotiate a trilateral free-trade pact.

The framework of the free-trade agreement is taking shape. This has to be welcome in a world conflicted by fragmentation, thanks to former US president Donald Trump’s unilateralism and isolationism and the politics and geography of the Covid-19 pandemic.

But it also raises the question of the future of the former Trans-Pacific Partnership free-trade agreement, renamed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership after the US withdrew in 2017, leaving 11 members including Singapore, Australia, New Zealand, Japan, Malaysia and Vietnam, accounting for 13 per cent of world GDP. After ratification by six of them the agreement came into force for those countries in December 2018.