After a transition period, it will eliminate tariffs on more than 80 percent of products traded intra-regionally. It will also harmonize more regulations and policies between members, including favorable cumulative rules of origin.

The RCEP will become the largest plurilateral trade agreement in the world, involving about 30 percent of global GDP and about the same share of the world’s population. It is expected to add US$186 billion to the world economy.

The RCEP marks the culmination of integration efforts that began decades ago in Asia and the Pacific. Embracing openness and regional cooperation, the region’s trade-to-GDP ratio rose from 17 percent in 1965 to 53 percent in 2018, contributing to unprecedentedly rapid economic growth. In the same period, the region’s share of global GDP increased from 13 percent to 33 percent.

What’s more, the ongoing COVID-19 pandemic has demonstrated that trade is not only a reliable engine of growth in the region, but has also been instrumental in fighting the virus. At the start of the pandemic, trade restrictions and export bans severely interrupted international supply chains. However, governments in Asia and the Pacific quickly realized the crucial role of trade in balancing the swings in demand and supply and filling domestic gaps.

As a result, struggling economies were able to import critical goods from other economies, which were able to continue production. Many early trade restrictions were, thus, subsequently lifted, as governments recognized that open borders were vital to ensuring adequate supply of critical goods, not least the personal protective equipment so crucial in this pandemic.

Trade has thus been a key tool in fighting COVID-19, and looking ahead, it will be vital for economic recovery. Indeed, the pandemic will have lasting impact on how we trade and do business across borders.

Popular

Mass poisonings cast doubt on free meals reforms

New data rules could unlock cross-border data flows

Malaysia must not breathe Indonesia’s governance failure