The Regional Comprehensive Economic Partnership (RCEP ) is a free trade agreement among the Asia-Pacific countries of Australia, Brunei, Cambodia, China, Indonesia, Japan, South Korea, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, Thailand, and Vietnam. The 15 member countries account for about 30% of the world's population (2.2 billion people) and 30% of global GDP ($29.7 trillion), making it the largest trade bloc in history. Signed in November 2020, RCEP is the first free trade agreement among the largest economies in Asia (excluding India), including China, Indonesia, Japan, and South Korea.
The RCEP was conceived at the 2011 ASEAN Summit in Bali, Indonesia, while negotiations formally launched during the 2012 ASEAN Summit in Cambodia. India, which took part in the initial negotiations but later decided to opt out, was invited to join the bloc at any time. Any other country or separate customs territory in the region can accede to the pact from 1 July 2023 onward. The treaty was formally signed on 15 November 2020 at the virtual ASEAN Summit hosted by Vietnam. For the first ten ratifying countries, the trade pact took effect on 1 January 2022.
The RCEP includes a mix of high-,Australia, Brunei, Japan, New Zealand, Singapore and South Korea middle-,China, Indonesia, Malaysia, the Philippines, Thailand and Vietnam and low-income countries.Cambodia, Laos and Myanmar It is expected to eliminate about 90% of the tariffs on imports between its signatories within 20 years of coming into force, and establish common rules for e-commerce, trade, and intellectual property. Several analysts predicted that it would offer significant economic gains for signatory states, boost post-pandemic economic recovery, as well as "pull the economic centre of gravity back towards Asia, with China poised to take the lead in writing trade rules for the region," leaving the United States behind in economic and political affairs in the region. Reactions from others were neutral or negative, with some analysts saying that the economic gains from the trade deal would be modest.
Membership Signatories All members of ASEAN (excluding ):
RCEP is the first trade agreement to include all three East Asian members of ASEAN Plus Three:
The two Oceanian members of ASEAN Plus Six:
Flag Country Capital Area Population Nominal GDP GDP per cap. PPP GDP GDP per cap. HDICurrency Official languages Leaders AustraliaCommonwealth of Australia Canberra 7,692,024 25,698,300 1,790,348 1,791,358 Australian dollar ($)(AUD) None (de jure) English (de facto) Monarch: Charles III Governor-General: Sam Mostyn Prime Minister: Anthony Albanese BruneiBrunei DarussalamNegara Brunei Darussalamنڬارا بروني دارالسلام Bandar Seri Begawan 5,765 459,500 15,510 34,249 Brunei dollar ($)(BND) Malay English Monarch: Hassanal Bolkiah CambodiaKingdom of Cambodiaព្រះរាជាណាចក្រកម្ពុជាRoyaume du Cambodge Phnom Penh 181,035 15,626,444 45,150 142,392 Cambodian riel (៛)(KHR) Khmer Monarch: Norodom SihamoniPrime Minister: Hun Manet ChinaPeople's Republic of China中华人民共和国 Beijing 9,596,961 1,400,050,000 18,532,633 35,291,015 Renminbi (Chinese yuan, ¥)(CNY) Standard Chinese see also: Languages of China General Secretary and President: Xi Jinping Premier: Li Qiang IndonesiaRepublic of IndonesiaRepublik Indonesia Jakarta 1,910,931 270,203,917 1,475,690 4,720,542 Indonesian rupiah (Rp) (IDR) Indonesian see also: Languages of Indonesia President: Prabowo Subianto Japan日本国 Tokyo 377,930 126,760,000 4,110,452 6,720,962 Japanese yen (¥) (JPY) None (de jure) Japanese (de facto) Monarch: Naruhito Prime Minister: Sanae Takaichi LaosLao People's Democratic Republicສາທາລະນະລັດ ປະຊາທິປະໄຕ ປະຊາຊົນລາວRépublique démocratique populaire lao Vientiane 236,800 7,123,205 15,190 78,713 Lao kip (₭) (LAK) LaoFrench General Secretary and President: Thongloun Sisoulith Prime Minister: Sonexay Siphandone Malaysia مليسيا Kuala Lumpur Putrajaya (administrative) 330,803 32,273,000 445,519 1,305,942 Malaysian ringgit (RM) (MYR) Malay Monarch: Ibrahim Prime Minister: Anwar Ibrahim Myanmar Republic of the Union of Myanmarပြည်ထောင်စု သမ္မတ မြန်မာနိုင်ငံတော် Naypyidaw 676,578 54,836,000 68,006 283,572 Burmese kyat (K) (MMK) Burmese see also: Languages of Myanmar President: Myint SweChairman of the State Administration Council and Prime Minister: Min Aung Hlaing New ZealandAotearoa Wellington 270,467 4,786,710 257,626 285,582 New Zealand dollar ($)(NZD) English Māori NZ Sign Language Monarch: Charles III Governor-General: Cindy Kiro Prime Minister: Christopher Luxon PhilippinesRepublic of the PhilippinesRepublika ng Pilipinas Manila 300,000 109,048,269 471,516 1,391,800 Philippine peso (₱) (PHP) English Filipino see also: Languages of the Philippines President: Bongbong Marcos SingaporeRepublic of SingaporeRepublik Singapura新加坡共和國சிங்கப்பூர் குடியரசு Singapore (city-state) 780 5,453,600 525,230 794,179 Singapore dollar ($) (SGD) English Malay Standard Chinese Tamil President: Tharman Shanmugaratnam Prime Minister: Lawrence Wong South KoreaRepublic of Korea대한민국大韓民國 Seoul 100,210 51,709,098 1,760,947 3,057,995 South Korean won (₩) (KRW) KoreanKorean Sign Language President: Lee Jae-myung Prime Minister: Kim Min-seok ThailandKingdom of Thailandราชอาณาจักรไทย Bangkok 513,120 68,298,000 548,890 1,644,322 Thai baht (฿) (THB) Thai Monarch: Maha Vajiralongkorn Prime Minister: Anutin Charnvirakul VietnamSocialist Republic of Viet NamCộng hòa Xã hội chủ nghĩa Việt Nam Hanoi 331,699 96,208,984 465,814 1,558,898 Vietnamese đồng (₫) (VND) Vietnamese General Secretary of the Communist Party of Vietnam: Tô Lâm President: Lương Cường Prime Minister: Phạm Minh Chính
Ratifications +Country SignatoryRatificationEffective15 November 2020 2 November 20211 January 2022 11 October 20211 January 2022 15 October 20211 January 2022 15 April 20211 January 20223 November 20222 January 2023 25 June 20211 January 2022 3 December 20211 February 2022 26 October 20211 January 2022 17 January 202218 March 20224 August 2021delayed 2 November 20211 January 20223 April 2023 2 June 2023 9 April 20211 January 2022 28 October 20211 January 2022 29 October 20211 January 2022
Applicants The trade agreement is open for new members 18 months after the partnership came into force. The following countries have applied for accession into the partnership:
(delayed)
: The Republic of Chile has formally requested accession to the RCEP. Claudia Sanhueza, Undersecretary of International Economic Relations, delivered the request letter to Satvinder Singh, Assistant Secretary General for the ASEAN Economic Community.
Potential applicants:
The following countries have been subject to media attention surrounding their potential involvement in the RCEP:
: The British Foreign Affairs Committee urged the UK Government to assess membership of the RCEP, as part of the UK's "Indo-Pacific tilt". : ASEAN has signaled that its newest member East Timor will join RCEP.
Contents
RCEP aims to lower tariffs, increase investment, and facilitate freer movement of goods around the region. It includes unified rules of origin throughout the bloc, which may facilitate international supply chains and trade within the region. It also prohibits certain tariffs. It does not focus on labour unions, environmental protection, or government subsidies.
The RCEP contains 20 chapters discussing trade within many sectors, including (but not restricted to):
Goods and services Investment Government Procurement Standards and Technical Regulations Intellectual Property Rights E-Commerce
The RCEP contains tariff schedules that intend to eliminate tariffs by 92 percent over a course of 20 years. The tariff schedules include the complete elimination of tariffs and quotas on over 65% of the goods trade within the RCEP bloc.Sutherland, Michael (2022)(https://crsreports.congress.gov/product/pdf/IF/IF11891) "Regional Comprehensive Economic Partnership". Congressional Research Service Tariff concessions included within the document will have varying effects based on different members political and economic context. For members that are already heavily liberalized, concessions will be lower than those with higher existing tariffs.Nicita, A. (2021). An assessment of the Regional Comprehensive Economic Partnership (RCEP) tariff concessions. UN.
Under the RCEP there is a high level of protection within the agricultural sectors. Crops and meat products experience the highest level of protection, especially when compared to global trade dynamics outside of the RCEP. Although agriculture will still experience high levels of protection, the RCEP will have significant contributions, with a current tariff reduction of 12.8 percent occurring within 8.4% of agricultural products.
Within the manufacturing sector, motor vehicles, apparel and leather, non metallic minerals, and textiles experience the highest levels of tariff protection. Conversely, extractive products and natural resources will experience little to no protection, facing zero or near zero tariff rates.
The RCEP is not as comprehensive as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, another free trade agreement in the region that includes some of the same countries. The RCEP "does not establish unified standards on labour and the environment, or commit countries to open services and other vulnerable areas of their economies."
The tariffs schedule just for Japan is 1,334 pages long.
Projected value
The combined GDP of potential RCEP members surpassed the combined GDP of Trans-Pacific Partnership (TPP) members in 2007. It was suggested that continued economic growth, particularly in China and Indonesia, could see total GDP in the original RCEP membership grow to over US$100 trillion by 2050, roughly double the project size of TPP economies. On 23 January 2017, President Donald Trump signed a memorandum withdrawing the United States from the TPP, a move which was seen to improve the chances of success for RCEP.
According to a 2020 projection, the agreement is expected to enlarge the global economy by US$186 billion. According to Peter Petri and Michael Plummer of the Brookings Institution, the RCEP could add $209 billion annually to world incomes, and $500 billion to world trade by 2030, and that "new agreements will make the economies of North and Southeast Asia more efficient, linking their strengths in technology, manufacturing, agriculture, and natural resources." According to computer simulations in a related paper also by Petri and Plummer published by the Peterson Institute for International Economics (PIIE), the RCEP will raise global national incomes in 2030 by an annual $147 billion and $186 billion respectively, "yield especially large benefits for China, Japan, and South Korea and losses for the United States and India", and "will be especially valuable because it strengthens East Asian interdependence, raising trade among members by $428 billion and reducing trade among nonmembers by $48 billion".
The simulations in Petri and Plummer's PIIE paper showed that the RCEP and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) would together more than offset the global negative economic effects of the China-United States trade war, but not the individual losses of China and the United States. Moreover, the incremental value of the CPTPP will be reduced by the trade war (from $147 billion to $121 billion) while the value of RCEP will be increased (from $186 billion to $209 billion). The PIIE working paper also stated that "RCEP will be economically significant with or without India, and indeed more significant than the CPTPP, with especially important benefits for China, Japan, and Korea" and that "RCEP will reorient trade and economic ties away from global linkages toward regionally focused relationships in East Asia."