New kids on the bloc: 15 countries just signed the world's largest trade agreement

11/19/20 7:00PM

There is a new kid on the (trading) bloc. This week 15 countries signed a free-trade agreement to create the Regional Comprehensive Economic Partnership (RCEP). That makes RCEP the largest trading bloc in the world — bigger than both the EU and the US-Canada-Mexico agreement.

‍China takes centre stage

‍This deal is a big... deal. For China it cements their status as the chief economic power of the region, and it gives them another avenue and institution to exert soft power from.

The deal signed represents the climax of more than a decade of negotiations, essentially combining a number of separate agreements between individual countries into one single agreement. In total RCEP is set to eliminate 90% of tariffs and will cover ~30% of the world's population.

‍India bails out

‍The one major omission from the deal is India. A major economic power in its own right, India was involved in negotiations up until last year. In the end India decided to skip the agreement, after fears that the deal would see a flood of cheap Chinese imports into the country, while doing little to help India sell its services — where it has more of a relative advantage.

Oh and in case you were wondering, the answer is yes — even multi trillion dollar deals like this one get signed on Zoom in 2020.

Jake Lahut

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The UAE’s OPEC exit will hit the group in the barrels

After just shy of 60 years in OPEC, its membership even predating its status as a nation-state, the United Arab Emirates yesterday announced its shocking departure from the oil production group, effective May 1, as the knock-on effects of the Iran war continue to play out across the Middle East and the energy landscape.

For context, the UAE produces the third-highest amount of oil in the group, per April data and OPEC’s latest set of annual statistics.

According to the cartel’s 2025 Annual Statistical Bulletin, the OPEC group was collectively exporting some 19 million barrels of crude oil a day last year, with the United Arab Emirates accounting for some 14% of that daily output.

UAExit means UAExit

The nation, whose energy minister told Reuters yesterday that the decision was taken “after a careful look at current and future policies related to level of production” and wasn’t made following discussions with any other country, made up a healthy share of the group’s total confirmed crude oil reserves, as well.

Of the 12 nations in the core group, which was founded by just five oil superpowers back in September 1960, only two (Iraq and Saudi Arabia) exported more barrels of crude oil daily, pumping out 3.36 million and 6.05 million barrels, respectively, each day to nations around the world.

For its part, the UAE said it will “continue its responsible role by gradually and thoughtfully increasing production, in line with demand and market conditions,” per the official state news agency. Clearly, the nation now wants a little more control of just how much oil it can pump around the world, with the UAE having to eat a large proportion of lost revenues due to its healthy abundance and OPEC restrictions.