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RCEP: Ship bound for shared future sets sail
According to relevant estimates, the RCEP will increase the GDP of member countries by an additional 0.2 percent per year by 2030.
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Representatives of signatory countries are pictured on screen during the fourth Regional Comprehensive Economic Partnership (RCEP) Summit held online during the ASEAN Summit on Nov. 15, 2020. (Courtesy of Trade Ministry/-)
T
he Regional Comprehensive Economic Partnership (RCEP), the world’s largest free trade agreement to date, will officially enter into force on Jan. 1, 2022, opening a new chapter of regional integration and common prosperity in the Asia-Pacific.
It rises as a modern, comprehensive, high-quality and mutually beneficial mega-free trade agreement binding 15 signatories, namely the 10 ASEAN member states, China, Japan, the Republic of Korea, Australia and New Zealand. Under the umbrella of the RCEP, tariffs on over 90 percent of goods will be eliminated progressively over the next 20 years, while trade in services and investment enjoy greater mutual access compared to the existing ASEAN-Plus-One FTAs, where at least 65 percent of the services sector will be fully open to regional investors.
It also prescribes a common set of rules and standards, including straightforward accumulative rules of origin, lowered trade barriers and streamlined processes. In addition to traditional FTA elements, the RCEP incorporates modern chapters of intellectual property rights, e-commerce, competition policy, government procurement and small and medium-sized enterprises (SMEs), setting a benchmark for economic and trade disciplines in the Asia-Pacific.
The RCEP is the most ambitious regional FTA initiated and led by ASEAN. In the wake of the Asian financial crisis in the late 1990s, East Asian cooperation came under the spotlight. ASEAN actively promoted regional economic integration of East Asia in pursuit of a stronger regional production network and market, so as to fortify the region’s resilience to shocks.
Since the beginning of the 21st century, ASEAN has not only successively established ASEAN-Plus-One FTAs with neighboring partners, but also initiated discussions on grander free trade architecture.
Based on abundant study and deliberation, ASEAN leaders introduced the framework for RCEP in 2011, which was embraced by ASEAN FTA partners and led to the launch of RCEP negotiations during the 21st ASEAN Summit in 2012.
Why is the RCEP so magnetic to regional players? Firstly, the flourishing of ASEAN-Plus-One FTAs had brought tangible benefits to regional countries, thus boosting their confidence in multilateral cooperation and free trade. These FTAs also provide a strong basis for an integrated regional trade arrangement.
