China and 14 other countries signed the Regional Comprehensive Economic Partnership (RCEP) this month, forming the largest trade pact in the world. Analysts predict the deal will increase the market size of Asia-Pacific, creating more opportunities for companies to produce and sell within the region. In particular, the agreement pushes back against a protectionist trend that set up barriers against trade using measures such as tariffs, according to Michael Hirson, practice head for China and Northeast Asia, at consultancy Eurasia Group.
When implemented, RCEP would remove potential restrictions on sourcing products from China by putting the country in the same category as other members of the trade agreement. Such streamlining “helps anchor China in regional supply chains, serving as a potential counterweight to disruptions from trade tensions and the pandemic,” Hirson said in a note over the weekend.