Analysts expect RCEP to boost trade and production in Asia, potentially generating an additional $209 billion in global revenue per year. Most of these gains will benefit the three largest economies, China, Japan and Korea. However, the agreement will divert trade away from non-participants, likely resulting in economic losses for the United States. At a summit held virtually due to the pandemic, 15 countries in the Asia-Pacific region agreed on Sunday to create the Regional Comprehensive Economic Partnership (RCEP), the world`s largest free trade agreement, with China at the helm. The agreement was virtually signed by heads of state and government at the summit of heads of state and government of the Association of Southeast Asian Nations (ASEAN) and external partners, which this year takes over the bloc`s rotating chairmanship. The RCEP Agreement includes 20 chapters on trade in goods and services, investment, temporary movement of natural persons, rules of origin, customs procedures and trade facilitation, means of trade, intellectual property, competition, government procurement and institutional arrangements. These disciplines will promote intra-regional trade between participating countries and could provide incentives for the reorganization of supply chains for companies with significant activities in these markets. The top 15 signatory states accounting for nearly 30% of global GDP and 30% of the world`s population include China, Japan, South Korea, Australia, New Zealand and the 10 countries of the Association of Southeast Asian Nations (ASEAN), namely Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, philippines, Singapore, Thailand and Vietnam (collectively the signatories of RCEP). Before entering into force, the RCEP must be ratified by the various countries that are also responsible for 28% of world trade and share a market of about 2.2 billion people, or 30% of the world`s population. The largest free trade agreement in history was signed over the weekend, with 15 countries in the Asia-Pacific region agreeing to sign it.
Overall, the agreement will cover 30% of the world`s GDP and population, surpassing the scale of the Trans-Pacific Partnership. In the digital space, RCEP is remarkable because it is one of the first times China has accepted global standards for e-commerce and data flows (although the practical impact may be limited by public policy exceptions so large that in this case they may ultimately swallow the rule). In a broader sense, the agreement does not go to the limits of e-commerce and digital commerce, despite their growing importance, which is accelerating due to COVID-19. Developing countries are busy concluding trade agreements – among themselves The agreement will enter into force when six ASEAN member states and three non-ASEAN countries ratify the agreement on their national procedures, which could take place in two years. For multinational companies, the signature and publication by rcep of the full text of the contract provides an assessment of the opportunities and risks for regional supply chains and the opportunity to examine how specific provisions may affect their activities in the region. Representatives of the RCEP signatories met for the first time in November 2012 to negotiate the RECP. Initially, India was also part of these negotiations, but it indicated in late 2019 that it had a number of issues that prevented it from joining the agreement. However, the Ministers` Declaration on India`s Participation in RCEP reaffirms that RCEP is open to India`s accession3 and expresses a strong willingness to reintegrate India into RCEP. „It is crucial that partners like China, when they make new deals like this, not only fill in the details of those deals, but also act faithfully to their minds,“ Birmingham told The Age newspaper. .