The Regional Comprehensive Economic Partnership (RCEP) agreement was signed by Asia Pacific nations including China, Japan and South Korea on Sunday, launching the world’s biggest free trade bloc, encompassing nearly a third of the world’s population and gross domestic product.
The 15 participating nations that also include Australia, New Zealand and the 10 members of the Association of Southeast Asian Nations inked the RCEP — nearly a decade in the making — on the final day of the 37th Asean Summit hosted virtually by Vietnam.
It would cover a market of 2.2 billion people, or almost 30% of the world’s population, with a combined GDP of USD26.2 trillion or about 30% of global GDP, and accounts for nearly 28% of global trade (based on 2019 figures).
Among the benefits of the agreement include a tariff elimination of at least 92% on traded goods among participating countries, as well as stronger provisions to address non-tariff measures, and enhancements in areas such as online consumer and personal information protection, transparency and paperless trading, according to a statement issued on Sunday by Singapore’s Ministry of Trade and Industry.
According to Vietnamese Prime Minister Nguyen Xuan Phuc, the completion of negotiations is a strong message affirming Asean’s role in supporting the multilateral trade system. “The agreement will contribute to developing supply chains that have been disrupted due to the pandemic as well as supporting economic recovery,” he said.
“The global and regional economies are facing huge obstacles and challenges caused by not only Covid-19 but also the decreased global trade,” he added.
Prior to the signing ceremony, RCEP Agreement, leaders of the participating countries said in a joint statement that the trade bloc is an unprecedented mega regional trading arrangement that comprises a diverse mix of developed, developing and least developed economies of the region.
It also includes simplified customs procedures while at least 65% of services sectors will be fully open with increased foreign shareholding limits.
The RCEP Agreement is critical to the region’s response to the Covid-19 pandemic and will play an important role in building the region’s resilience through inclusive and sustainable post-pandemic economic recovery process, said the leaders.
It demonstrates our strong commitment to supporting economic recovery, inclusive development, job creation and strengthening regional supply chains as well as our support for an open, inclusive, rules-based trade and investment arrangement, ” said the leaders.
The trade pact represents an important step forward towards an ideal framework of global trade and investment rules,” they said.
A minimum of six Asean countries in addition to three non-Asean partners must ratify RCEP for it to come into force, Singapore’s Minister of Trade and Industry Chan Chun Sing told reporters following the signing. Singapore plans to approve the deal in the next few months,” he said.
“The signing of the RCEP is not only a landmark achievement of East Asian regional cooperation, but also a victory of multilateralism and free trade,” Li said.
The conclusion of the negotiations of the RCEP will send a strong message of ASEAN’s leading role in supporting the multilateral trade system, helping to create a new trading structure in the region, facilitating trade sustainably, developing the disrupted supply chains and supporting post-pandemic recovery,” he said.
The RCEP agreement will accelerate the building of the ASEAN Economic Community and thereby allow ASEAN to become dynamic and strong partners in promoting cooperation for shared prosperity, Li said later at the signing ceremony held via video conference.
In a statement, Malaysian Minister of International Trade and Industry Mohamed Azmin Ali said the signing of the RCEP agreement will be a testament to the world on the efforts to strengthen the multilateral trading system and uphold the development agenda in the World Trade Organization (WTO).
“It will also demonstrate to the world that ASEAN together with the ASEAN Free Trade Agreement partners say ‘no’ to protectionism and ‘yes’ to free trade,” he said.
The RCEP is “a hugely symbolically significant agreement, coming at a time of global trade uncertainty,” said Australian Minister for Trade, Tourism and Investment Simon Birmingham.
“It says in a really powerful and tangible way that our region, which has been the driver of global economic growth, is still committed to the principles of trade, openness and ambition,” he told the Australian media Sunday.
The signing of the RCEP deal came after more than 30 rounds of negotiations, which were launched in November 2012, as well as a number of specific leaders’ and ministerial meetings between the participating countries.