RCEP covers a market of 2.2 billion people with a combined size of $26.2 trillion or 30% of the world’s gross domestic product. Photo credit: ADB
Signatory countries to the Regional Comprehensive Economic Partnership (RCEP) Agreement have made progress in implementing the world’s largest trade pact, ministers said during their second meeting about the accord held in Semarang, Indonesia on 21 August.
In a joint statement, the ministers welcomed the entry into force of RCEP for Indonesia and the Philippines, on 2 January 2023 and 2 June 2023, respectively. This development brings the full implementation of RCEP a step closer to making ASEAN the hub of production networks within the region.
The trade pact entered into force on 1 January 2022 for Brunei Darussalam, Cambodia, Lao People's Democratic Republic, Singapore, Thailand, Viet Nam, Australia, People's Republic of China, Japan, and New Zealand; on 1 February 2022 for the Republic of Korea; and on 18 March 2022 for Malaysia.
The ministers also welcomed the establishment of a support unit that will be tasked to coordinate the trade deal’s implementation. The support unit will be organized under the ASEAN Secretariat in Jakarta.
The ministers endorsed the terms of reference for the support unit as well as its funding arrangement and tasked officials to ensure it can start operations in 2024.
The ministers also encouraged officials to continue their work to ensure the transparent, smooth, and effective implementation of the trade pact.
The ministers are optimistic businesses in the region will avail themselves of opportunities under RCEP and deepen regional economic integration.
The meeting also noted that progress has been made in the discussions pertaining to the procedures for accession to RCEP. The ministers reaffirmed that RCEP is an open and inclusive regional engagement and encouraged the RCEP Joint Committee to continue its discussion, with a view to achieving accession procedures in a timely manner.
RCEP is an Asia–Pacific trade agreement that took effect in January 2022. The trade pact comprises the 10 ASEAN states, Australia, the Peoples Republic of China, Japan, the Republic of Korea, and New Zealand. It covers a market of 2.2 billion people with a combined size of $26.2 trillion or 30% of the world’s gross domestic product.
RCEP is expected to increase competitiveness and strengthen global production network, promote regional supply chain through better market access for exports of goods and services, reduce or eliminate trade barriers, and enhance transfer of technology.
RCEP will create a new center of gravity for global trade, according to the United Nations Conference on Trade and Development (UNCTAD). An UNCTAD study expects RCEP to lead to the elimination of about 92% of tariffs among the countries over a period of 20 years. RCEP is also expected to boost intraregional exports by $42 billion from about $2.3 trillion in 2019 through trade creation and diversion.