The leaders of the Association of Southeast Asian Nations (ASEAN) have succeeded in persuading their top trading partners to start negotiations on the Regional Comprehensive Economic Partnership (RCEP) to create the world’s largest trading bloc. Consisting of a 10-member regional group and their six major trading partners, this trading bloc will potentially transform the region into an integrated market of more than three billion people with a combined GDP of $15 trillion, roughly equal to that of the United States. ASEAN includes Thailand, Laos, Cambodia, Vietnam, Indonesia, Malaysia, Singapore, Philippines, Myanmar, and Brunei, RCEP adds the nations of India, Japan, South Korea, China, New Zealand and Australia.
This partnership of 16 countries comprises about half of the world’s population in the part of the world that is experiencing the greatest economic growth; 30% of global GDP. RCEP would “rewrap” five current free trade agreements (FTAs) with ASEAN’s six major trading partners, China, Japan, India, South Korea, Australia and New Zealand into an integrated regional economic pact. The hope is this will allow deeper economic cooperation than the existing FTA agreements and ultimately lower trade barriers and custom duties across the region by the end of 2015. It is predicted that the repositioning of the financial heart of Asia will turn towards Singapore, and for businesses to branch out from there to other RCEP investments as per the needs of each business.
Based on iPIERS data, U.S. exports to ASEAN countries has continued to increase during 2009 – 2011; a total of 5,749,798 TEUs in 2011, 2,580,235 of those TEUs being exported to China.
U.S. imports from ASEAN countries grew by 15% from 2009 to 2010, but remained flat in 2011. A total of 11,956,944 TEUs were imported into the U.S. in 2011, with 8,494,239 imported from China.
World economic recovery efforts continue to be a challenge with the volatile global financial and economic situation. East Asian economies, which rely on trade with developed nations, have been jeopardized by the European and American economies as regional economic integration has become a better choice of ASEAN and its dialogue partners. In an effort to not exclude Trans-Pacific Partnership (TPP), the U.S. - ASEAN Expanded Economic Engagement initiative was launched. It is aimed at expanding trade and investment ties with the U.S. and smoothing a path for the Trans-Pacific Partnership, which excludes China.
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