Trade Agreements & Regional Blocs
380 regional trade agreements reshape global commerce, eliminating tariffs on $25+ trillion in trade and integrating markets across continents.
Key Insights on Trade Agreements
RCEP Dominates by Population
The Regional Comprehensive Economic Partnership covers 15 countries, 2.3 billion people (29% of world population), and 29% of global GDP. Intra-ASEAN trade increased 7% in 2024, and the agreement will lift 27 million to middle class by 2035.
USMCA Leads in Economic Value
The US-Mexico-Canada Agreement (USMCA) covers the world's wealthiest trade bloc with $56,072 GDP per capita—5x higher than RCEP's $11,000. The three economies account for 28% of global GDP and $1.6 trillion in mutual trade.
CPTPP Expands Membership
The UK joined CPTPP in Q4 2024, making it 12 members. Indonesia, Philippines, UAE, Uruguay, and Costa Rica are negotiating accession. The agreement covers 11 Pacific Rim economies with $19,966 GDP per capita and advanced provisions on digital trade.
Proliferation Continues
380 RTAs are in force at WTO, with 56 more unsigned agreements awaiting notification. The World Bank tracks 400+ preferential trade agreements, showing continued expansion despite concerns about "spaghetti bowl" complexity.
Largest Trade Agreements by GDP Coverage (2024)
Combined GDP of member countries in trillions USD
Key Finding: USMCA leads with $28.5T GDP, followed by EU Single Market ($19.2T) and RCEP ($29.5T). While RCEP has larger total GDP, USMCA's per capita wealth ($56K vs $11K) makes it the world's most valuable integrated market.
Understanding Trade Agreements
Types of Trade Agreements
- Free Trade Agreements (FTAs): Eliminate tariffs on substantially all trade between members
- Customs Unions: FTA plus common external tariff (e.g., EU, MERCOSUR)
- Common Markets: Customs union plus free movement of labor and capital
- Partial Scope Agreements: Reduce tariffs on selected products only
Mega-Regional Agreements
RCEP (Regional Comprehensive Economic Partnership): 15 Asia-Pacific countries, entered force January 2022. Covers 30% of global GDP and population.
USMCA (US-Mexico-Canada Agreement): Replaced NAFTA in 2020 with stronger labor, environmental, and digital trade provisions.
CPTPP (Comprehensive and Progressive Trans-Pacific Partnership): 11 (soon 12+) Pacific economies with advanced rules on services, IP, e-commerce.