Intra-Asian trade represents nearly two thirds of total Asian trade as of 2016, according to the Asian Development Bank. This is in stark contrast to the past two years where the large markets of the US and the European Union dominated the majority of Asian exports. As with the rest of the world, however, trade volumes in Asia have grown at a slower rate over the past two years, although the growth in trade amongst regional trading partners has generally outpaced the overall growth in trade. What does all this mean? Intra-Asian trade will continue to increase its share of total Asian trade flows, making the need for a regional trade pact imperative as global supply chains consolidate in Asia Pacific. With the Trans-Pacific Partnership (TPP) nearly, though not entirely, eliminated as a possibility the region looks to the China-led Regional Comprehensive Economic Partnership Agreement (RCEP) to fill the gap. In order to achieve the promise of fully integrated Asia Pacific trade, however, some argue that the RCEP will need to be more ambitious and address more than simply tariff rate reductions.
June 27 2017
