Economists have expressed optimism the Regional Comprehensive Economic Partnership (RCEP) can help mitigate the damaging effects of escalating trade tensions that have cast gloom over the future of the global and domestic economies.

It is hoped the RCEP, a proposed free trade agreement between the 10 member states of ASEAN and its six free trade agreement (FTA) partners, will put Indonesia in a stronger position to handle the fallout of the ongoing trade war between the United States and China, the world’s two largest economies.

Together, ASEAN’s 10 member countries and its six FTA partners — Australia, China, India, Japan, New Zealand and South Korea — account for roughly 45 percent of the world’s population and 40 percent of global trade, with a combined GDP of US$21.3 trillion, making the RCEP a highly lucrative deal.

“When ASEAN talks to China, we have to talk as a single entity. That is why the RCEP is important,” former Indonesian finance minister Chatib Basri told the press in Jakarta on Tuesday, adding that ASEAN countries could not deal with the two giants bilaterally.

Meanwhile, Australia-Japan Research Center director Shiro Armstrong said he believed the RCEP could minimize the impacts of the US-China trade war.

“It [the RCEP] is large enough in scale to push back against the US and global protectionism,” he said, adding that the signatories could keep their GDPs stable by trading among themselves amid global economic uncertainties and a looming global recession. 

He said that if RCEP signatories removed all trade barriers, they could increase their GDPs even if the rest of the world was drawn into a recession. 

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