RCEP free trade agreement enters into force
The Regional Comprehensive Economic Partnership (RCEP) Agreement enters into force today for Australia, Brunei Darussalam, Cambodia, China, Japan, Lao PDR, New Zealand, Singapore, Thailand and Viet Nam, paving the way for the creation of the world’s largest free trade area.
RCEP is a free trade agreement (FTA) between the 10-member states of the Association of Southeast Asian Nations (ASEAN) (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam) and its six free trade agreement (FTA) partners (Australia, China, India, Japan, New Zealand and Republic of Korea). The RCEP is expected to eliminate about 90% of the tariffs on imports between its signatories within 20 years of coming into force, and establish common rules for e-commerce, trade, and intellectual property.
According to data by the World Bank, the agreement would cover 2.3 billion people or 30% of the world’s population, contribute USD25.8 trillion about 30% of global GDP, and account for USD12.7 trillion, over a quarter of global trade in goods and services, and 31% of global foreign direct investment (FDI) inflows.
The RCEP Agreement will also enter into force on 1 February 2022 for the Republic of Korea. As for the remaining signatory states, the RCEP Agreement will enter into force 60 days after the deposit of their respective instrument of ratification, acceptance, or approval to the Secretary-General of ASEAN, as the Depositary of the RCEP Agreement.
The entry into force of the RCEP Agreement is a manifestation of the region’s resolve to keep markets open; strengthen regional economic integration; support an open, free, fair, inclusive, and rules-based multilateral trading system; and, ultimately, contribute to global post-pandemic recovery efforts.
Through new market access commitments and streamlined, modern rules and disciplines that facilitate trade and investment, RCEP promises to deliver new business and employment opportunities, strengthen supply chains in the region, and promote the participation of micro, small and medium enterprises into the regional value chains and production hubs.