The Regional Comprehensive Economic Partnership (RCEP) was initiated by the 10 ASEAN countries and participated by the six countries that have free trade agreements with ASEAN, China, Japan, South Korea, Australia, New Zealand, and India, totaling 16 It is composed of two countries and aims to establish a free trade agreement with a unified market by reducing tariffs and non-tariff barriers. In addition to reducing tariffs, the parties have also consulted on the formulation of rules in a wide range of areas such as intellectual property rights, electronic commerce (EC), and customs procedures. The RCEP will establish Asia’s largest free trade zone and cover 30% of global gross domestic product (GDP) and trade volume. This will also be the first free trade framework between China, Japan and South Korea.
At the 21st ASEAN held at the end of 2012, 16 countries jointly signed the RCEP framework and announced the official start of negotiations. In the following eight years, various countries launched long and complicated rounds of negotiations. India announced its withdrawal at the final juncture of the negotiations and decided not to participate in the signing of RCEP.
In November 2020, 15 countries have completed the fourth regional comprehensive economic partnership agreement (RCEP) negotiations in all areas.Disagreements in all areas have reached a consensus, the review of all legal texts has also been completed, and the agreement will be officially signed on November 15.
RCEP is a comprehensive, modern, high-quality and mutually beneficial free trade agreement
It has 20 chapters, including the basic characteristics of free trade agreements, trade in goods, trade in services, investment access, and corresponding rules.
It is a modern free trade agreement. It includes modern content such as e-commerce, intellectual property, competition policy, government procurement, and small and medium-sized enterprises.
It is a high-quality free trade agreement. In terms of trade in goods, the level of openness will reach more than 90%, which is higher than that of WTO countries. In terms of investment, the negative list is used to negotiate investment access.
It is a mutually beneficial free trade agreement. This is mainly reflected in the balance of interests in areas such as trade in goods, trade in services, and investment rules. In particular, the agreement also incorporates provisions on economic and technical cooperation, giving Laos, Myanmar, Cambodia and other least developed countries some transitional arrangements, including providing these members with more favorable conditions so that they can better integrate Regional economic integration.
For the entire Asia-Pacific region, RCEP means huge business opportunities. RCEP will cover the two largest markets with the greatest growth potential in the world, one is the Chinese market with 1.4 billion people, and the other is the ASEAN market with more than 600 million people. At the same time, these 15 economies, as important engines for economic growth in the Asia-Pacific region, are also important sources of global growth.
Once the agreement is implemented, due to the significant elimination of tariff barriers, non-tariff barriers and investment barriers, the demand for mutual trade within the region will increase rapidly. This is the trade creation effect. At the same time, part of the trade with partners outside the region will be transferred to intraregional trade. This is the transfer effect of trade. In terms of investment, the agreement will also bring about new investment creation effects. Therefore, RCEP will boost the GDP growth of the entire region, create more jobs, and significantly improve the well-being of nationals of all countries.