China and 14 other countries have agreed to form the world's largest free trade bloc, in terms of GDP, encompassing nearly a third of all economic activity.
After eight years of wrangling over the details, the Regional Comprehensive Economic Partnership or RCEP was finally signed virtually on Sunday.
The trade pact was signed on the sidelines of the annual summit of the 10-nation Association of Southeast Asian Nations (ASEAN).
As per the pact China and 14 other countries have agreed to form the world's largest free trade bloc, in terms of GDP, encompassing nearly a third of all economic activity.
Many in Asia are hoping this deal will help hasten the recovery of the economy from the shocks of the coronavirus pandemic.
In the online ceremony, leaders of RCEP countries took turns standing behind their trade ministers who, one by one, signed copies of the agreement, which they then showed triumphantly to the cameras.
What is RCEP?
Launched in 2012, RCEP is a trade pact between the 10-member ASEAN bloc, along with China, Japan, South Korea, Australia and New Zealand. India had been due to sign but pulled out last year.
The deal includes 2.1 billion people, with RCEP's members accounting for around 30 percent of global GDP.
Its aim is to lower tariffs, open up trade in services and promote investment to help emerging economies catch up with the rest of the world.
Specifically, RCEP is expected to help reduce costs and time for companies by allowing them to export a product anywhere within the bloc without meeting separate requirements for each country.
It also touches on intellectual property, but will not cover environmental protections and labour rights.
Why it matters
This pact sets new trade rules for the region and has China's backing but does not include the United States.
Experts are of the opinion that it solidifies China's broader geopolitical ambitions in the region, where it has faced little competition from the US since President Donald Trump pulled out of a trade pact of its own.
Why India pulled out
India withdrew last year over concerns about cheap Chinese goods entering the country. However if India wants it can join the group any time.
India raised alarm about market access issues, fearing its domestic producers could be hard hit if the country was flooded with cheap Chinese goods.
Textiles, dairy, and agriculture were flagged as three vulnerable industries.
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