China-backed Asian trade bloc looks to expand, upgrade deal

KUALA LUMPUR: A large but loose Asian trade bloc that includes China, the Regional Comprehensive Economic Partnership, will consider adding new members and finding ways to boost trade when its leaders meet next month, the Malaysian hosts said on Monday.

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Malaysia will host an RCEP summit during the ASEAN gathering to review the trade pact and consider new member applications.
The summit aims to modernise the RCEP deal and reinforce multilateralism amid rising US-China trade tensions.
Malaysia says China won't dominate the agenda, as all RCEP members support balanced engagement with global partners.

Malaysia plans to hold a summit of the RCEP, the world's largest trade bloc, when it hosts the annual gathering of the Association of Southeast Asian Nations in Kuala Lumpur.

Leaders of the RCEP - which includes all 10 ASEAN members as well as China, Japan, South Korea, Australia and New Zealand - have not held an official meeting since November 2020, when they signed a trade deal aimed at lowering tariffs, boosting investment and allowing freer movement of goods.

The RCEP is seen as a potential buffer against tariffs imposed by U.S. President Donald Trump's administration, though its provisions are considered weaker than some other regional trade deals due to competing interests among members.

The October meeting will let members suggest improvements to the RCEP trade deal and consider requests from some countries to join, Malaysia's trade minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz told Reuters in an interview ahead of a meeting of ASEAN economic ministers this week.

He declined to provide details on potential changes or name countries that have applied to join, citing confidentiality. But he said he was optimistic the RCEP can be "more relevant and current".

MALAYSIAN MINISTER: MEETING WILL NOT BE 'HIJACKED' BY CHINA

China has called on countries in the region to embrace multilateral frameworks such as the RCEP to counter the impact of the U.S. tariffs.

Tengku Zafrul said he was not worried about the meeting being "hijacked" by China, as ASEAN and RCEP members agreed on multilateralism and were committed towards engaging with others, including the United States.

"To be fair to Malaysia and ASEAN member states, and even other RCEP members, they have said the same thing. I mean, Korea, Japan, New Zealand, Australia and all have stated their views on multilateralism," he said.

"So whether China will hijack the agenda: I don't think so, because there's nothing new in our belief about that principle."

Trump's tariff drive has seen levies of between 10% and 40% placed on goods from Asian countries, with the majority of major ASEAN economies levelled with a rate of 19%.

The U.S. tariffs are expected to be a key point of discussion during the ASEAN ministers' gathering this week, which will be attended by U.S. Trade Representative Jamieson Greer.

Tengku Zafrul said the ASEAN meetings will let the bloc discuss key issues with both the United States and China, the region's two largest trade partners.