Negotiations to complete the Regional Comprehensive Economic Partnership (RCEP) trade deal are “nearing substantial conclusion” according to Philippine Trade Secretary Ramon Lopez. Talks are ongoing this week in Manila. The ASEAN-based RCEP trade deal may subsume the Japanese-led push to alter the Trans-Pacific Partnership arrangements following the U.S. exit. TPP is more complex than RCEP, leaving RCEP negotiators keen to avoid incorporating TPP elements. However, the Japanese government remains committed to TPP, as outlined in Panjiva research of April 20.

China’s position will be vital, though near-term it may be pre-occupied with U.S. relations. One of the time pressures on China is the National Congress in October which will set the tone for leadership in the coming five years. Economic pressure may be lacking – Panjiva analysis of Chinese exports shows growth to RCEP countries is actually accelerating. In the three months to April 30 shipments expanded by 7.7% vs. a 2.7% decline in the fourth quarter of 2016.

Chart shows trailing three month exports vs. a year earlier, segmented by region. Data through February based on Panjiva calculations, most recent months based on preliminary China General Customs Authority figures. Source: Panjiva