The Asia-Pacific region continues to be the largest contributor to the worldwide build-up of preferential trade agreements (PTAs). Looking at the stock of PTAs with at least one party from Asia-Pacific region, 184 trade agreements are in force, 19 are signed and pending ratification, and 95 are still under negotiation (as of December 2020).

The majority of PTAs go beyond the liberalization of trade in goods, with 54% of all enforced PTAs in the region covering both goods and services.

Bilateral PTAs account for approximately 78% of all PTAs in force. In terms of geographical coverage, 49% of all Asia-Pacific region PTAs are with economies outside the region, which reinforces the claim about the Asia-Pacific economies actively participating as dialogue partners within as well as from outside the region.

The number of newly-signed PTAs by the Asia-Pacific economies has more than halved in 2020 from the previous year. This was mostly due to the COVID-19 pandemic, which not only disrupted international trade flows, but also caused some trade negotiations to stall. From the 10 outstanding PTA initiatives started since January 2019 (six intraregional and four extraregional), only three commenced negotiations during 2020. As of December 2020, none of the new initiatives have been signed.

Trade negotiators are increasingly turning to including digital trade issues in the PTAs: Eight of the 17 trade agreements signed between 2019-2020 already include specific e-commerce provisions. Moreover, regional economies, especially Singapore, have signed Digital Trade Agreements (DTAs). As of December 2020, the region has successfully signed three DTAs – the Japan-United States DTA signed in 2019, while Australia-Singapore Digital Economy Agreement (DEA) and Chile-New Zealand- Singapore Digital Economy Partnership Agreement (DEPA) were both signed in 2020. More agreements, driven by Singapore, are coming their way because Singapore has ongoing negotiations with the Republic of Korea and will start negotiations with the United Kingdom in 2021.

The Regional Comprehensive Economic Partnership (RCEP) signed on 15 November 2020 is a major milestone towards trade integration in Asia and the Pacific. Even without India’s participation, this agreement accounts for about 30% of global GDP, the world population and world trade. It updates the coverage of existing “ASEAN+1” PTAs and includes chapters that go beyond traditional trade issues, such as chapters dedicated to e-commerce, investment or small and medium-sized enterprises (SMEs). However, the most important feature of the RCEP (apart for boosting confidence in regional cooperation) is a conversion of multiple rules of origin into a simplified and a single set of rules, which potentially can lead to higher utilization of this deal especially for the SMEs and GVCs.