The ASEAN Secretariat recently announced that the Regional Comprehensive Economic Partnership (RCEP) has reached the entry into force threshold and will be implemented on January 1, 2022 for Brunei, Cambodia, and Laos that have formally submitted their approval documents. , Singapore, Thailand, and Vietnam, as well as 4 non-ASEAN members, China, Japan, New Zealand, and Australia. Observers said that after RCEP takes effect, it will promote ASEAN economic and trade growth, accelerate the process of ASEAN economic integration, and help build the ASEAN economic community.
RCEP was officially signed on November 15, 2020. It currently has 15 member countries. Its total population, economic volume, and total trade account for about 30% of the global total. It is the world’s largest free-standing trade area. According to the agreement, after RCEP is ratified by 6 ASEAN member states and 3 non-ASEAN member states, it can take effect mutually among these ratified countries.
Observers believe that after the agreement comes into effect, it will further enhance ASEAN's central status and role within the regional framework. Singaporean Minister of Trade and Industry Chan Chun Sing previously stated that ASEAN played a key role in the RCEP signing process and promoted cooperation among all parties.
As RCEP continues to open up to new partners in the future, the scale and influence of RCEP will continue to expand, further stabilizing ASEAN’s central position in the regional architecture, and helping to build a more diverse and inclusive Asia-Pacific free trade. district. Jiaojiamon Bidadhunrunji, deputy director of the Center for Multilateralism at the S. Rajaratnam School of International Studies at Nanyang Technological University in Singapore, said that RCEP highlights that ASEAN's influence has expanded beyond ASEAN and will promote ASEAN to propose an ASEAN-centered region in the future. governance mechanism.
At the same time, observers are also optimistic about the prospects for economic and trade cooperation among countries in the region under the RCEP framework, believing that RCEP rules may become the benchmark and legal precedent for future regional free trade cooperation. As the world's largest free trade agreement, the entry into force of RCEP will promote the development of free trade in the region, inject impetus into ASEAN's economic recovery in the post-epidemic era, and effectively promote the construction of an ASEAN economic community.
A study by the Peterson Institute for International Economics shows that RCEP will expand trade between ASEAN and other members and directly promote economic growth. According to the institute's calculations, by 2030, RCEP is expected to drive a net increase in member countries' exports of US$519 billion and a net increase in national income of US$186 billion.
In recent years, the level of economic integration among ASEAN countries has continued to improve. Overseas experts predict that RCEP will further enhance the level of economic integration and integration within ASEAN and help ASEAN completely build an economic community.
What impact will RCEP have after it takes effect?
At a briefing in March this year, Yu Benlin, director of the Department of International Economic and Trade Relations of the Ministry of Commerce, said that companies will import advanced technology, important equipment, key components, daily consumer goods, and pharmaceuticals at lower costs. and nursing equipment, as well as imported design and R&D, energy conservation and environmental protection and other productive services to better meet the consumption upgrade needs of the domestic market.
In addition, the agreement will also help build supply chains and value chains in the region. “The formation of a unified free trade zone in the region will help form supply chains and value chains in the region based on comparative advantages, and will facilitate the flow of goods, technology, services, and capital in the region, including the cross-border flow of people. It has great benefits and creates a 'trade creation' effect," said Wang Shouwen, Vice Minister of Commerce and Deputy Representative for International Trade Negotiations.
Take the clothing industry as an example. If the clothing produced in Vietnam is exported to China now, it will have to pay tariffs. After joining the free trade agreement, the regional value chain will come into play; China imports wool from Australia and New Zealand because it has signed a free trade agreement, so it may increase in the future. Import wool tax-free, and then weave it into fabric in China. The fabric may then be exported to Vietnam. Vietnam will use the fabric to weave it into clothing, and then export it to other countries such as South Korea, Japan, and China. These may be tax-free. Based on this, you can It promotes the development of the local textile and garment industry, creates local employment, and is also very beneficial to exports.
Therefore, after the signing of RCEP, if more than 90% of products gradually become zero-tariff, it will greatly promote the economic vitality of more than a dozen member countries, including China.
In addition, according to He Yaqiong, head of the Operation Monitoring and Coordination Bureau of the Ministry of Industry and Information Technology, it will also improve the quality of China's manufacturing industry and promote China's manufacturing industry to move towards mid-to-high-end.
Source: Comprehensive from Xinhua News Agency, China Securities Journal, etc. Editor: Yunyang Email: fnweb@126.com Welcome to subscribe to the Financial Times to see more exclusive news information