What is RCEP? RCEP Review

Signatory countries

RCEP members are 10 Southeast Asian countries + China, Japan, South Korea + Australia and New Zealand

ASEAN 10 countries: Indonesia, Malaysia, Cambodia, Philippines, Myanmar, Singapore, Laos, Thailand, Vietnam, Brunei

China, Japan, South Korea, Australia, New Zealand

Features

1. RCEP is a comprehensive agreement. It covers 20 chapters, including market access for goods trade, services trade, investment, etc., as well as a large number of rules on trade facilitation, intellectual property rights, e-commerce, competition policy, government procurement, etc. It can be said that the agreement covers all aspects of trade and investment liberalization and facilitation.

2. RCEP is a modern agreement. It adopts regional rules of origin cumulation to support the development of regional industrial chains and supply chains; it adopts new technologies to promote customs facilitation and promote the development of new cross-border logistics; it adopts a negative list to make investment access commitments, greatly improving the transparency of investment policies; the agreement also incorporates high-level intellectual property rights and e-commerce chapters to meet the needs of the digital economy era.

3. RCEP is a high-quality agreement. The number of zero-tariff products in goods trade as a whole exceeds 90%. The level of openness of service trade and investment is significantly higher than the original "10+1" free trade agreement. At the same time, RCEP has added free trade relations between two important pairs of countries, China and Japan, and Japan and South Korea, which has significantly improved the degree of free trade in the region. According to estimates by international think tanks, by 2025, RCEP is expected to drive member countries' export growth by 10.4% more than the baseline. RCEP is a reciprocal agreement. RCEP members include developed countries, developing countries, and some least developed countries. There are huge differences in economic systems, development levels, and scales among members. The RCEP agreement takes into account the demands of all parties to the greatest extent and achieves a balance of interests in the areas of market access and rules such as goods, services and investment. The agreement also gives differential treatment to the least developed countries, and specifically sets up two chapters on small and medium-sized enterprises and economic and technical cooperation to help developing member countries strengthen capacity building, promote inclusive and balanced development in the region, and share the results of RCEP.

Influence

Covering approximately 2.3 billion people

Total GDP exceeds US$2.3 billion

It accounts for about 25% of the world's total trade.

change

1. Shopping is cheaper

More high-quality consumer goods from other countries will enter the Chinese market with lower tariffs.

2. Travel is more convenient

Free movement of people, traveling abroad is more convenient and faster

3. Enterprises feel more at ease

Form a unified rule system in the region. Reduce operating costs and reduce uncertain risks of operations.

4. More efficient investment

Investors from outside the region entering a country means entering the entire region, and the market and space will grow greatly, which will help attract investment.

significance

RCEP supports trade and investment liberalization and facilitation with practical actions, which will boost confidence in the global economy. The signing of RCEP shows that all member countries have pledged to reduce tariffs, open markets, and reduce standard barriers, sending a strong signal against unilateralism and protectionism, strongly supporting free trade and the multilateral trading system, and helping to form positive expectations for the global economy and boost the global economic recovery after the epidemic.

Development History

The RCEP negotiations started in 2012 with the 10 ASEAN countries, and six dialogue partner countries including China, Japan, South Korea, Australia, New Zealand and India were invited to participate.

Over the past seven years, after three leaders’ meetings, 19 ministerial meetings, and 28 rounds of formal negotiations;

In September 2019, the RCEP negotiations came to a close with a major breakthrough in negotiations with India. India agreed to cut or eliminate 80% of Chinese import tariffs under the 16-nation free trade agreement.

On November 4, 2019, the third Regional Comprehensive Economic Partnership Leaders' Meeting issued a joint statement announcing that the 15 member states had completed all text negotiations and substantially all market access negotiations, and would initiate the legal text review work. India has temporarily not joined the agreement because "important issues have not been resolved."

In April 2020, a new round of RCEP negotiations was held, revealing the intention to sign the agreement as scheduled within the year.

On November 15, 2020, RCEP was signed via video conference.

References

• 1. Detailed explanation of RCEP: 15 countries join hands to build a super economic circle. In addition to zero tariffs, what other changes will it bring? : Caijing.com [cited on 2020-11-13T16:00:00.000Z]