Marking a significant regional milestone, it is hoped that the RCEP will help its 15 signatories recover from the economic fallout of the coronavirus pandemic.
As OBG outlined in July, the signing of RCEP represents a major vote of confidence in multilateralism. As the culmination of an eight-year negotiation process, it mandates for the creation of the world’s largest trading bloc.
The deal’s signatories – namely the 10 ASEAN members plus China, Australia, Japan, New Zealand and South Korea – together constitute 30% of the world’s population and just under 30% of its GDP.
The 510-page agreement should provide a substantial boost to trade in the region, lowering tariffs, standardising Customs procedures and improving regulatory harmony between its members. Its 20 chapters cover topics from digital procedures to financial services and intellectual property rules.
“The RCEP is expected to boost the region’s value chains and contribute to the development of all participating economies,” Doan Duy Khuong, chairman of the ASEAN Business Advisory Council 2020, told OBG earlier this year.
Designed to strengthen regional cooperation and widen market access, RCEP constitutes a rejection of the trend towards protectionism seen across the world in recent years, most notably in the US-China trade war.
While some less-developed countries still need to be brought up to speed – for example, Cambodia and Laos have been given several years to upgrade their Customs procedures – the agreement has been largely welcomed as an economic win-win for its members, with the US-based Peterson Institute for International Economics estimating that it could add 0.2% to their respective economies by 2030.
The deal is expected to take effect within two years, after ratification by the member countries.
RCEP, Covid-19 and China +1
Crucially, it is also hoped that the provisions in the agreement will enable signatories to combat the effects of Covid-19 more effectively, both individually and as a bloc.
A key element of this is related to supply chains: these were severely disrupted by the pandemic, leading countries around the world to recognise the merits of a more diversified approach. In line with this, many companies and government entities that had previously relied mainly on China have adopted a ‘China +1’ strategy, strengthening domestic capacity and setting up factory lines or identifying suppliers in other countries – while still maintaining interests in China.
RCEP could further facilitate this shift by making it easier to establish a production base in an ASEAN member state and export to the other 14 members of the new trading bloc.
Read the rest here
Pandemic drives sea freight prices to record high
The Covid-19 pandemic, which initially brought global shipping to a virtual standstill, did not bode well for the industry and led to “an unprecedented drop in demand”
Thailand and EU resume FTA negotiations
Thailand and the European Union (EU) are now back in talks to establish a Free Trade Agreement (FTA), for the first time since the initiative was put on hold in 2014.
Subscribe via Email
Thai baht becoming the region’s worst-hit currency in COVID pandemic
According to data from its tourism ministry as well as the World Bank, Thailand had only a little over 34,000...
Asia’s slow rate of vaccination is a thorn in the region’s economic recovery
Southeast Asia has been hit badly. Daily infections for Indonesia, Thailand, Vietnam are at their worst, on a seven-day moving...
TAT expects 850 billion baht ($25.7 bln) in tourism revenue after successful reopening
The Tourism Authority of Thailand (TAT) has set this year’s revenue target at 850 billion baht, 300 billion of which...
Download 1xBet mobile and play all over the world
Placing profitable bets or playing in a casino is now possible comfortably even without being tied to a computer. It...
3 ways Asia can recover from the COVID-19 pandemic faster
Countries in the East Asia and Pacific region will benefit from cooperation in three major areas: vaccine deployment, reviving sectors...