Why Didn’t Russia Join RCEP?
Op/Ed by Chris Devonshire-Ellis
- EAEU is negotiating Free Trade Agreements with several ASEAN nations and India
- Russia-South-East Asian trade ties are increasing
- Opportunities for Russian / EAEU based trading companies to prepare for Asian market access
The Regional Comprehensive Economic Partnership (RCEP) Free Trade Agreement was signed on Sunday, comprising in East Asia, China, Japan and South Korea, in addition to Australia, New Zealand and the ten South-East Asian ASEAN countries. It is the world’s largest free trade agreement and will impact on 2.2 billion consumers. Yet with the Russian Far East neighboring China, Japan and South Korea, questions are being asked in some quarters in Russia why the country wasn’t included in the deal.
The simple answer is that Russia already has and is a member of its own Free Trade Area, being the lead nation of the Eurasian Economic Union (EAEU), which also includes Armenia, Belarus, Kazakhstan and Kyrgyzstan. While there is a case for Russia being part of the RCEP deal, bringing along the other four partners would prove difficult – they are remote by comparison and disconnected from all the other RCEP partners. That is not to say however that Armenia, Belarus, Kazakhstan and Kyrgyzstan will remain apart from South-East Asia – the EAEU has signed its own FTA with ASEAN members Vietnam and Singapore, while FTA with other ASEAN members such as Cambodia, Thailand and Indonesia are all looking increasingly likely in the future. The future for potential trade development and investment between Russia and ASEAN is promising – bilateral trade between Russia and Vietnam has now reached US$10 billion per annum from basically zero in just four years. Given that most, if not all ASEAN members are interested, trade between Russia and South-East Asia is going to become a significant trade corridor within the decade.
The EAEU has also signed a Free Trade Agreement with China – albeit one that at present is non-preferential, meaning no cross-border tariff reductions have been agreed. But when this changes – and negotiations are continuing – trade between the EAEU members and China will significantly increase. Russian trade with China for example is on track to double to US$200 billion by 2024.
Not a member of RCEP – having pulled out of the deal last year, is India, yet another country negotiating an FTA with the EAEU.
So as can be seen, although Russia did not join RCEP, a great deal is being discussed and is in hand to provide Russia – as well as Armenia, Belarus, Kazakhstan and Kyrgyzstan with access to South-East Asia. These are developments well worth keeping an eye on as they move towards tariff negotiation conclusions and open up new trade opportunities for Russia and EAEU businesses in Asia.
- China-EAEU Trade Share Increases By 20% In 2020
- India Turns Down RCEP Free Trade. Will It Turn To The Eurasian Economic Union?
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