What Does Asia Pacific's Trade Agreement Mean?

Plus500 | Monday 16 November 2020

Asian-Pacific futures are ticking higher today following news of a proposed regional trade deal that can see 15 economies increase trade in Asia-Pacific.

Asia deal

On the last day of the ASEAN Summit, China, Japan, North Korea, Singapore, Vietnam, Australia, New Zealand, and others virtually inked a deal that would encourage a more streamlined process for international trade within the region. Some of the benefits include a 92% reduction in taxes, easier customs processes, and creating greater unification in e-commerce regulation. 

This regional free-trade deal, still waiting to be approved by each country, would include a third of the world’s GDP, approximately $26.2 trillion. It would also increase the accessibility of companies to trade with partnered countries which includes 2.2 billion people, or a third of the world’s population.

Markets React to Asian- Pacific Trade Deal

A regional trade deal is welcoming news to economies in the region that have been struggling during economic slowdowns, caused by the global Coronavirus pandemic. This deal, which aims to strengthen supply chains while introducing a greater ease of paperless trading has the potential to see many companies expand their trade across the region.

Today, Asian index futures are trading higher, pushing China’s A50 1.3% higher, Japan’s Nikkei (Japan225) futures increased by 1.3%, and Singapore’s MSCI 25 (Singapore25) 1.1% higher. In contrast, Australia’s ASX 200 dropped 0.3%.

Hong Kong & Japan Prepare for a Changed Economy

Hong Kong proposed a new initiative to speed up the IPO process on the HKEx (0388.HK) to as little as one day. They are currently the only exchange that takes five days for an IPO and will rely on new software to speed up the process to be more in line with global exchanges.

At the same time, Japan is considering how to continue its economic growth after seeing their GDP grow 21.4% last quarter with the help of government subsidies. This quarterly growth was large, but still less than half of what was lost since last year and lagged behind the recovery of other developed economies.

While this agreement is a large development for the region, it still needs to be accepted by each participating country. This presents an opportunity for amendments, leaving traders to wait and see what the final version of this agreement will hold.


Get more from Plus500

Expand Your Knowledge

Videos & Articles help you expand your trading knowledge.

Prepare Your Trades

Our Economic calendar helps you explore global market events.

Trade Without Surprises

Understand the full costs of your trades now for better expense management later.


This information is written by Plus500 Ltd. The information is provided for general purposes only, and does not take into account any personal circumstances or objectives. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. No representation or warranty is given as to the accuracy or completeness of this information. It does not constitute financial, investment or other advice on which you can rely. Any references to past performance, historical returns, future projections, and statistical forecasts are no guarantee of future returns or future performance. Plus500 will not be held responsible for any use that may be made of this information and for any consequences that may result from such use. Hence, any person acting based on this information does so at their own discretion. The information has not been prepared in accordance with legal requirements designed to promote the independence of investment research.

Need Help?
24/7 Support