At the end of a four-day ASEAN Summit in Hanoi, Vietnam, on Sunday, leaders from 15 Asia-Pacific nations sealed one of the biggest trade deals in history, seeking to reduce barriers in an area covering a third of the world’s population and economic output.
Negotiations on the Regional Comprehensive Economic Partnership (RCEP) Agreement took eight years, where the first negotiations commenced in Brunei Darussalam in 2013. The signing marked a major step forward for economic integration in the region, and followed almost a decade of negotiations.
The agreement was signed during a virtual conference attended by leaders from 15 signatory countries – Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam, Australia, China, Japan, the Republic of Korea and New Zealand.
WHAT IS RCEP?
The agreement serves to broaden and deepen ASEAN’s engagement with Australia, China, Japan, the Republic of Korea and New Zealand. Together, these RCEP participating countries account for about 30 per cent of the global gross domestic product (GDP) and 30 per cent of the world population.
According to the ASEAN Secretariat, the objective of the RCEP Agreement is to establish a modern, comprehensive, high-quality, and mutually beneficial economic partnership that will facilitate the expansion of regional trade and investment and contribute to global economic growth and development.
WHO WILL BENEFIT FROM THE NEW DEAL?
Accordingly, it will bring about market and employment opportunities to businesses and people in the region. The RCEP Agreement will work alongside and support an open, inclusive, and rules-based multilateral trading system.
The RCEP Agreement is an agreement made not just for today but the future as well. It updates the coverage of the existing ASEAN Plus One Free Trade Agreements (FTAs) (ASEAN’s FTAs with the five dialogue partners) and takes into consideration changing and emerging trade realities, including the age of electronic commerce, the potential of micro, small and medium enterprises, the deepening regional value chain, and the complexity of market competition.
The RCEP Agreement will complement the World Trade Organization (WTO), building on the WTO Agreement in areas where the parties have agreed to update or go beyond its provisions.
The RCEP Agreement is comprehensive, in terms of both coverage and depth of commitments. On its coverage, the RCEP Agreement comprises 20 chapters and includes many areas that were not previously covered in the ASEAN Plus One FTAs. The RCEP Agreement has specific provisions covering trade in goods, including rules of origin; customs procedures and trade facilitation; sanitary and phytosanitary measures; standards, technical regulations and conformity assessment procedures; and trade remedies.
It also covers trade in services including specific provisions on financial services; telecommunication services; and professional services, as well as the temporary movement of natural persons.
In addition, there are chapters on investment; intellectual property; electronic commerce; competition; small and medium enterprises (SMEs); economic and technical cooperation; government procurement; and legal and institutional areas including dispute settlement.
In terms of market access, the RCEP Agreement achieves liberalisation in trade in goods and services and has extended coverage to investment.
FREE-TRADE FOR THE REGION
At the recently concluded 4th RCEP Summit hosted by ASEAN Chair 2020 Vietnam, leaders of the RCEP partner countries emphasised the signing of the RCEP Agreement as a reflection of the region’s strong resolve to promote free trade.
According to a joint statement, the leaders agreed that the signing shows the commitment of participating countries in developing multilateralism and free trade, boosting solidarity and partnership for greater inclusive cooperation in global economic growth and development.
The strategic value of the RCEP is a catalyst for driving the economy forward and enhancing economic sustainability in the region.
RCEP will fully reflect the emerging pattern of integration where economies can come together and contribute to each other’s development.
HOW IT BEGAN
In August 2012, the 16 economic ministers endorsed the Guiding Principles and Objectives for Negotiating the Regional Comprehensive Economic Partnership.
The RCEP negotiations were launched by leaders from 10 ASEAN member states and six ASEAN FTA partners – Australia, People’s Republic of China, Republic of India, Japan, Republic of Korea, and New Zealand – during the 21st ASEAN Summit and Related Summits in Phnom Penh, Cambodia, in November 2012.
Of the 16 countries, 15 signed the agreement, with India being offered to join RCEP participation when ready.
The objective of the RCEP negotiations was to achieve a modern, comprehensive, high-quality, and mutually beneficial economic partnership agreement among ASEAN member states and ASEAN FTA partner countries.
HOW IMPORTANT IS IT?
His Majesty Sultan Haji Hassanal Bolkiah Mu’izzaddin Waddaulah ibni Al-Marhum Sultan Haji Omar ‘Ali Saifuddien Sa’adul Khairi Waddien, Sultan and Yang Di-Pertuan of Brunei Darussalam in a titah emphasised that the RCEP Agreement will play a significant role in the region’s post-pandemic recovery efforts.
His Majesty also expressed confidence that the RCEP will be an engine for growth that will shape the region’s economic landscape in the years to come and applauded the leaders’ demonstration of solidarity and cooperation in concluding the RCEP negotiations, in support of free trade despite economic challenges.
Chinese Premier Li Keqiang said that the signing of the deal is “a victory of multilateralism and free trade” adding that, “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.”
Vietnamese Prime Minister Nguyen Xuan Phuc meanwhile 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”.