Source: Socialist Republic of Vietnam
In a joint statement after the signing of the RCEP, leaders of the member countries emphasised that this is both a new and highly ambitious free trade agreement initiated by ASEAN and will contribute to enhancing the Association’s central role in regional mechanisms and frameworks, while enhancing cooperation between ASEAN and its partners.
In fact, with a market of 2.2 billion people (equivalent to 30% of the world’s population), accounting for about 30% of GDP and 28% of global trade value, the RCEP is an unprecedented regional FTA, because a diverse mix of developed and developing economies.
The RCEP consists of 20 chapters, 17 annexes and 54 schedules of commitments covering market access, rules and disciplines, and economic and technical cooperation. Member countries expect the RCEP to become a “benchmark” of new trading standards, pioneering the setting of legal standards and creating precedent for future regional trade agreements.
At the recent Asia-Pacific Economic Cooperation (APEC) Ministerial Meeting, APEC member countries highly lauded the significance of the RCEP in relation to promoting free and open trade, creating motivation for the promotion of the economic recovery, and encouraging further processes of economic integration, towards the goal of forming an overall Free Trade Area in the Asian-Pacific region.
Internationally, with high level and comprehensive regulations and standards, the RCEP has marked an important step towards an ideal legal framework for the global trading and investment system. In the context of fierce competition, even trade conflicts occurring in the world, the RCEP has created a timely push, reviving multilateralism and the global trading system.
Many experts agree that as the most important trade agreement since the World Trade Organisation (WTO) was born in 1994, the RCEP is of great importance, creating momentum for economic recovery efforts after the COVID-19 pandemic. And more importantly, this new generation FTA will redraw the “economic and strategic map” in Asia, and even more broadly, in the Indo-Pacific region.
Many comments from international media emphasised that the “Asian Century” has now fully arrived with the signing of the RCEP. The major factor that continues to pull the focus of the world economy towards Asia is intra-regional trade. The total value of trade among Asian countries has reached US$26.2 trillion, greater than the level of both Europe and North America combined. With 15 member economies, including some of the world’s biggest economic powers such as China and Japan and the continuing expansion of another major economy, India, the RCEP is a solid foundation for Asian internal trade to grow even more rapidly.
Together with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) that came into effect, the RCEP turns Asia-Pacific into a confluence point for modern and high-quality multilateral FTAs. At the same time, the fact that the 15 RCEP economies form the largest free trade bloc in the world also puts pressure on stagnant multilateral trade processes.
The U.S. Chamber of Commerce said in a recent statement that it is concerned that the US is being left behind as economic integration accelerates across the Asia-Pacific region, and when the US is standing outside both of the world’s fastest growing trade groups, CPTPP and RCEP.
Experts also warned, the RCEP is a “wake-up call” with the European Union (EU), when the world’s largest FTA creates a new centre of trade power without the participation of either the US and the EU. Therefore, in order not to fall behind, the EU cannot continue to delay its completion of free trade negotiations as with the Southern Common Market (MERCOSUR) or with Canada and the US.
Not only opening up opportunities to increase intra-regional trade exchange, the RCEP has also created new impetus for multilateral trade processes, and encouraged external partners to cooperate, and contribute to development and economic integration in the Asia-Pacific region.