Asia forms world's biggest trade bloc, without US

A China-backed free trade bloc, spanning 30% of the world's economy, was formed at a virtual summit on Sunday in a move that likely gives Beijing greater influence and leaves Washington on the outside.

David Doyle reports.

With a flurry of signatures the world's biggest trade bloc came into existence on Sunday (November 15); fifteen Asia Pacific economies forming the China-backed Regional Comprehensive Economic Partnership at a virtual summit.

And one notable absence?

The United States.

With the US, under President Donald Trump, having left the Barack Obama-led Trans-Pacific Partnership - the world's biggest economy is now on the outside of two trade groups spanning the world's fastest-growing region.

And it's the world's second-biggest economy that will likely benefit.

China will now have greater scope to shape the region's trade rules thanks to the partnership, which groups the 10-member Association of Southeast Asian nations, or ASEAN, with Japan, South Korea, Australia, New Zealand, and China.

The RCEP aims to progressively lower tariffs across many areas and also marks the first time rival eastern powers China, Japan, and South Korea have been in the same trade deal.

Economists say it could also help Beijing cut its dependence on overseas markets and technology - a shift that's been accelerated by a deepening rift with Washington.

Despite a President-elect who was vice president in the US administration that drove the Trans-Pacific Partnership forward, analysts say Joe Biden is unlikely to rejoin the TPP any time soon as significant domestic challenges will be prioritized.

Vietnam, which hosted Sunday's summit, said the bloc will account for 30% of the world's economy, 30% of its population, and will reach 2.2 billion consumers.