Australia has signed one of the biggest trade deals in history with China and 14 other nations – but relations with Beijing show no sign of improving.
Leaders from 15 Indo-Pacific countries signed the pan-Asian trade agreement called the Regional Comprehensive Economic Partnership on Sunday after eight years of negotiations.
One of the world’s biggest free trade deals, RCEP eliminates 90 per cent of tariffs and simplifies business with common rules to access markets.
Prime Minister Scott Morrison (left) and Trade Minister Simon Birmingham (front) after signing the Regional Comprehensive Economic Partnership on Sunday during a virtual ceremony
The agreement, which is yet to be ratified, includes nine of Australia’s top trading partners: China, Indonesia, Japan, South Korea, Malaysia, New Zealand, Singapore, Thailand and Vietnam, who together account for 66 per cent of Australia’s exports.
Trade Minister Simon Birmingham said the 15 nations in RCEP covered 30 per cent of the world’s population and 30 per cent of global Gross Domestic Product.
‘Better access for our farmers and businesses means more jobs for Australians overall,’ he said.
‘For our farmers and exporters, they get a more common set of rules across all 15 nations.
‘For our services export industry, they get significant new access across financial, banking, aged care, healthcare, education, and other types of services industries, right into provision of architectural or engineering and planning services.’
Prime Minister Scott Morrison said the agreement was good news for Australian businesses.
‘This agreement covers the fastest growing region in the world and, as RCEP economies continue to develop and their middle classes grow, it will open up new doors for Australian farmers, businesses and investors.’
The new trade agreement standardises some market access provisions across 15 Indo-Pacific nations making trade easier, and cuts tariffs
The nations in RCEP cover 30 per cent of the world’s GDP and population
Significantly, the RCEP standardises rules of origin for products, the Financial Times reported.
Under previous agreements, a company in Vietnam might make an air fryer eligible for free trade to Indonesia but need different components to be eligible for free trade to Japan.
Now, any product made under RCEP can go to all 15 countries.
However the agreement set relatively few common standards for products, mostly left agriculture out and had mixed coverage of services.
The 15 nations could not agree on cross-border data flows.
However, in a blow to the deal, regional giant India refused to join in, having withdrawn from talks in 2019.
Labor said on Sunday that the agreement did nothing to fix Australia’s diplomatic problems with China.
‘We’ve got big problems with China at the moment, getting goods into China’ opposition housing spokesman Jason Clare said.
‘It’s pretty extraordinary that after being in government for seven years, this government can’t get anyone in Beijing to answer the phone.
China’s Premier Li Kequiang looks on as Commerce Minister Zhong Shan (right) signs the RCEP
The virtual ASEAN Summit was held online on Sunday due to coronavirus restrictions. The leaders and trade ministers of the 15 RCEP nations posed for a virtual group photo
‘The bottom line is, when you’ve got a country which is your biggest trading partner — we make one in three dollars from trade from China — then you’ve got to lean into it and make sure you’ve got the contacts in China to fix things when there’s a problem.’
China has targeted Australian exports of lobsters, wine, barley, beef, and timber in ongoing retaliation for Canberra’s request for an independent investigation of the origins of the coronavirus which emerged in Wuhan, China, in 2019.
The ruling Communist party informally told all Chinese companies to stop buying Australian barley, sugar, red wine, logs, coal, lobster and copper earlier this month.
Since April, China has slapped an 80 per cent tariff on Australian barley, suspended beef and cotton imports, and told students and tourists not to travel Down Under.
Who signed the RCEP?
The Regional Comprehensive Economic Partnership is one of the world’s biggest free trade deals.
It was signed on Sunday by the 10 members of the Association of Southeast Asian Nations: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam
An extra five nations joined the pact: Australia, China, Japan, New Zealand and South Korea
The 15 nations together represent 30 per cent of the world’s population and 30 per cent of global GDP
Regional giant India withdrew from the talks in 2019 and did not sign the free trade pact
The General Administration of Customs of China issued a warning notice to exporters claiming to have found an invasive pest known as the bark beetle Ips grandicollis, in logs imported from Queensland.
Beijing has continued to flex its muscles in the South China Sea, prompting Asia-Pacific leaders including Japanese Prime Minister Yoshihide Suga to voice their concern at the 18-member East Asia Summit on Saturday, held virtually due to coronavirus restrictions.
China has claimed sovereignty over almost the entire resource-rich South China Sea, and has rapidly built artificial islands with military infrastructure in the disputed area.
Australian Prime Minister Scott Morrison will fly to Japan on Monday to meet with Mr Suga to sign a defence pact.
He will be the first foreign leader to visit Japan following Mr Suga’s election on September 14.