Trade

China is the centerpiece of a new 15-nation Asia-Pacific trade deal.

SINGAPORE — Fifteen countries in the Asia-Pacific region, including China, signed a mammoth trade deal Sunday, creating a regional trade bloc that excludes the U.S.

Leaders signed the agreement, called the Regional Comprehensive Economic Partnership, or RCEP, during this year’s virtual ASEAN summit. ASEAN is the acronym for the Association of Southeast Asian Nations.

Policy experts say the deal is a victory for China as it battles for influence and supremacy in the region.

Because the U.S. isn’t part of the deal, analysts say it will impact American farmers. Impacts will vary by commodity, they say, but there likely won’t be any immediate changes because the deal is set to be phased in over 20 years and still needs to be ratified.

“(The deal) could impact growers in the long run, and I think those impacts will be made clearer over time,” said Mark Powers, president of the Northwest Horticultural Council.

The new trade bloc covers about one-third of both the global economic output and of earth’s population. Participating countries include China, Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam, Australia, Japan, New Zealand and South Korea. India bowed out last year over concerns that lower tariffs could hurt producers.

RCEP will reduce or eliminate tariffs on a broad range of goods and services between participating countries.

Northwest tree fruit producers could be jilted, according to Todd Fryhover, president of the Washington Apple Commission. Southeast Asia, Fryhover said, offers the best returns for Northwest growers — especially Vietnam and Indonesia.

If China, for example, were able to offer an apple at a 0% tariff compared to a U.S. apple with a 10% tariff, that would give China an edge.

China is the world’s largest producer of apples.

But Powers said panicking is premature. It’s unclear yet, he said, what individual tariff rates will be or how quickly they will be phased in. Powers said there likely won’t be any significant changes this year.

Steve Mercer, spokesman for U.S. Wheat Associates, said the agreement will likely have “little if any potential effect or disruption” on U.S. growers’ Asian-Pacific wheat markets.

This is because, Mercer said, even though Australia is a competitor, “the Aussies already had duty-free access for wheat markets in the other countries that signed the agreement.”

RCEP was eight years in the making, and the U.S. was excluded from the deal for complex reasons. When Barack Obama was president, a different deal called the Trans-Pacific Partnership, or TPP, was the centerpiece of his “pivot to Asia.” But enthusiasm for TPP was limited in Congress, and in 2017, President Donald Trump withdrew the U.S.

The 11 remaining nations then created a modified version called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP.

Under a potential Biden administration, the U.S. could have the option to return to CPTPP or join RCEP, but Powers said growers shouldn’t hold their breath.

Trade agreements, he said, usually take at least two years to negotiate.

“It’s clear trade is not the top priority. I just don’t think we should be overly optimistic the trade picture is going to immediately change,” he said.

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