Highlights of RCEP
Highlights of RCEP
- 15 member countries signed the Regional Comprehensive Economic Partnership agreement (“RECP”) on 15 November 2020.
- The member countries are the ten ASEAN countries (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam) and other five partner countries (Australia, China, Japan, New Zealand and South Korea).
- The population of the Member States is about 2.2 billion, accounted for 30 % of the global population, and 30% of the global GDP and 28% of global trade (based on year 2019 data). RCEP not only has the potential to be a major platform for global trade, it could also become a major global platform.
- India, which joined the negotiation earlier, withdrew from the negotiation, but can choose to join RCEP in the future.
- The RCEP will be fully effective after it is ratified and passed domestically in 9 member countries, which is estimated to take at least 6 months to 2 years to complete the process.
- The main purpose of RCEP is to establish an integrated overall mechanism to promote free trade in the 15 countries and to unify different rules of origin for providing a higher degree of consistency for enterprise supply chain management.
- The important breakthrough of RCEP is the first free trade agreement between China and Japan, Japan and South Korea.
- Compared with traditional bilateral free trade agreements, RCEP has a much broader scope: including trade in goods, trade in services (financial services, telecommunications and professional services, etc.), investment, intellectual property rights, e-commerce, government procurement and competition.
- Although the benefits of the service sector of RCEP is not so obvious, but through the RCEP framework platform, foreign service providers can be closer to local markets. In addition, local markets will be opened for foreign investment by way of negative list for foreign investment market access. This offers some unprecedent opportunities to enter huge markets like China and Japan.
- In e-commerce, RCEP contains new provisions aimed at supporting small and medium enterprises to participate in e-commerce and data flow, promote privacy and consumer protection. Except for the financial services industry, it also enables electronic identity verification and electronic signatures.
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