The Regional Comprehensive Economic Partnership (RCEP) was signed online after 8 years of negotiation.

RCEP is comprised of ten members of the Association of Southeast Asian Nations (ASEAN), along with China, Japan, South Korea, Australia and New Zealand.

Members make up nearly a third of the world's population and 29 of global GDP.

The new free trade zone will be larger than both the US-Mexico-Canada Agreement and the European Union.

RCEP is expected to eliminate a series of import duties within 20 years.

The agreement also covers intellectual property, telecommunications, financial services, e-commerce, and professional services.

But maybe the new "rules of origin" - the official rules that define the product's traceability - will have the biggest impact.

Many member states already have free trade agreements (FTAs) with each other, but there are still limitations.

"Existing FTAs ​​can be very complex to use compared to RCEP," said Deborah Elms from the Asian Trade Center.

Businesses with global supply chains may face tariffs even in an FTA because their products contain ingredients manufactured elsewhere.

For example, a product made in Indonesia that contains Australian components may face tariffs elsewhere in the ASEAN free trade area.

According to RCEP, components from any member country will be treated equally, which could give companies in RCEP countries an incentive to find suppliers in their commercial sector. this block.

Although the RCEP is an ASEAN initiative, the agreement is seen by many as an alternative to the China-backed Trans-Pacific Partnership (TPP) Agreement.

TPP does not have China participating but includes many Asian countries. Twelve member countries signed TPP in 2016 before US President Donald Trump withdrew the United States in 2017.

The remaining members continue to form the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) with 11 members.

Although it includes fewer member countries, the CPTPP cuts tariffs more and includes labor and environment provisions than the RCEP does.

The RCEP brings together countries that often have faulty diplomatic relations - especially China and Japan.

Both Australia and China signed the agreement, despite reports that China may boycott some Australian imports because of political differences.

International trade is much lower on the agenda of this year's US election and President-elect Joe Biden has said relatively little about whether his trade policy will change significantly or whether he will review whether to join TPP or not.