Regional Comprehensive Economic Partnership Successfully Concluded
ISSUING AUTHORITY:
Ministry of Commerce of the People’s Republic of China
DATE OF ISSUANCE：
November 15, 2020
After eight years of negotiations, China and 14 other Asia-Pacific countries signed the Regional Comprehensive Economic Partnership (“RCEP”) on November 15, 2020, the world’s biggest trade pact involving all 10 member countries of the Association of Southeast Asian Nations and five of its major trading partners - China, Japan, South Korea, Australia and New Zealand.
The RCEP contains 20 chapters in total covering trade in goods; customs procedures and trade facilitation; sanitary and phytosanitary measures; standards, technical regulations and conformity assessment procedures; trade remedies; trade in services; temporary movement of natural persons; investment; intellectual property; e-commerce; competition policy; small and medium enterprises; economic and technical cooperation; government procurement; dispute resolution and etc., aiming 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.
After the RCEP comes into effect, the following measures, among others, will be taken by the member countries:
● Reduction of tariffs. About 30 percent of the goods in Cambodia, Laos and Myanmar will enjoy zero tariff treatment. About 65 percent of goods in other member countries will enjoy zero tariff.
● Opening of markets. Each member country will open up markets in at least 100 sectors. Cambodia, Laos and Myanmar will enjoy special treatment.
China also plays a crucial role in RCEP for the following reasons:
● Huge market. China accounts for about 65 percent of the population in the market, and its GDP and foreign exchange reserves account for half of the total.
● Sufficient capital. In 2018, China invested $16 billion in other 14 countries, attracting $14 billion of foreign investments in the region.
● Sound business environment. World Bank’s “Global Business Environment Report 2020” indicates China’s business environment has been listed among the top 10 economies with the greatest improvement in the global business environment for two consecutive years.
● Huge technical strength. China helps other developing countries build infrastructure and train professionals from all walks of life.
The total population and economic and trade volume of the 15 member economies account for about 30 percent of the world’s total, indicating that about one-third of the world’s economies now form an integrated market, said Wang Shouwen, vice-minister of the Ministry of Commerce. Further, the significance of the creation of the RCEP’ is reflected in the fact that it replaces NAFTA as the largest trading bloc by GDP; RCEP’s share of global GDP is approximately 30% whereas the EU’s share is approximately 19% and NAFTA’s share is approximately 26%. Once ratified and implemented, the RCEP will significantly boost regional trade and investment, reinforce industrial and supply chains, enhance the ability of all parties to fight against the pandemic as well as promoting the economic recovery of all member countries. It will surely open a new chapter of cooperation for the Asian economy and promote the region’s long-term prosperity and growth.
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