The RCEP has been signed, at last – but resistance to China could yet prove a hurdle before it takes effect

Opposition to the deal could still come from participants’ parliaments, with analysts pointing to Australia, South Korea and Japan’s shaky relationships with Beijing

Malaysia and Thailand are also seen as possibly delaying ratification – and even sans hurdles, the deal’s mostly likely start date could be January 1, 2022

Reading Time:5 minutes

Leaders and trade ministers of 15 Asia-Pacific nations pose for a virtual group photo during the 4th Regional Comprehensive Economic Partnership (RCEP) Summit in Hanoi, Vietnam, on November 15. Photo: EPA

Published: 8:05pm, 16 Nov 2020Updated: 6:45pm, 17 Nov 2020

Analysts have singled out domestic resistance in countries at odds with Beijing as one of the potential banana skins ahead for the Regional Comprehensive Economic Partnership (RCEP), which was formed on Sunday by China and 14 other Asia-Pacific economies after years of hard-fought negotiations.

While the signing of the world’s largest trading bloc signalled a final consensus among the 15 countries’ sitting governments, there remains the likelihood they may face opposition to the deal in their respective national parliaments, where majority support is required for the pact to come into force.

Trade analysts identified Australia – currently experiencing an unprecedented dip in ties with China – as well as Malaysia and Thailand as among the economies that might delay ratification.

The two Southeast Asian economies are on good terms with Beijing but have dithered over another multilateral trade pact, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), leading to questions of whether such scepticism would spill into post-facto thinking about the RCEP.

And even if there were no hurdles, the most likely start date for the deal would be January 1, 2022, rather than sometime next year, the observers said. Subsequently, with extensive so-called flexibility provisions on implementation timelines baked into the RCEP, participants may only feel its full effect years from now.

The historic agreement between the 10-nation Association of Southeast Asian Nations (Asean) and five outside powers requires domestic ratification by at least six members of the regional bloc and three of the non-Asean countries before it comes online.

RCEP participants might only feel its effects years from now, analysts say. Photo: Reuters