Last Sunday marked a momentous occasion as fifteen countries in the Asia-Pacific region converged to sign one of the biggest free trade deals in history, covering 2.2 billion people and 30% of the world’s economic output.

As the first trade deal to simultaneously involve rival East Asian powers – China, Japan and Korea – the agreement represents a crucial milestone for economic integration in the region. According to the Peterson Institute for International Economics, the Regional Comprehensive Economic Partnership is predicted to potentially add almost $200 bn annually to the global economy by 2030.

It is no secret that the virus has devastated Southeast Asia. Earlier this month, it was reported that Indonesia fell into its first recession in 22 years. In August, Thailand’s economy witnessed its biggest GDP fall since 1998 as a result of the pandemic. Indeed, many signatories have expressed hope that by facilitating closer interdependence and freer trade, RCEP will boost Covid-19 economic recovery within their countries.

Nonetheless, limitations remain.

Unlike the overlapping Trans-Pacific Partnership trade, however, the RCEP is relatively modest. It fixates on the reduction of tariffs, whilst barely scratching the surface of more complex issues such as cross-border data flow, e-commerce and agriculture.

There is a reason for that. The Asia-Pacific region is incredibly diverse. While common ground might be easily established amongst ASEAN countries such as Malaysia and Singapore,  the negotiation process becomes much more complicated when New Zealand and Japan are added to the mix. The terms of agreement appear to have been kept superficial to accommodate all of the diverging interests. It is likely that countries involved are expecting its sheer size – bigger than that of the European Union and the US-Mexico-Canada agreement – to compensate.

Whatever its limitations in practical terms, the real significance of RCEP lies in the way it signals Asia’s commitment towards trade liberalisation, during a time when other regions have grown sceptical.