Beijing, 30 December 2021 (TDI): China has finalized the preparation for the implementation of the Regional Comprehensive Economic Partnership (RCEP) agreement with coming into force on 1st January.
The agreement will take effect in six member states of ASEAN. They are Brunei, Cambodia, Laos, Singapore, Thailand, and Vietnam. Aside from that, it will also take effect in China, Japan, New Zealand, and Australia from 1st January.
The trade deal will add more than 90 % of merchandise trade between the member states eventually leading to zero tariffs. The 15 member states are home to 2.27 billion people and they have a total gross domestic product of approximately 26 trillion US dollars.
Furthermore, the member states have total exports of 5.2 trillion US dollars. This together accounts for about 30 % of the world’s total exports. With the huge population, the eclectic membership, and the extraordinary potential, the free trade bloc is predicted to increase trade growth and promote global economic recuperation.
What is RCEP?
The RCEP agreement was launched in 2012 and signed amongst 15 participating countries in November 2020. Earlier this year, China took the lead in ratifying the deal and submitting the instrument of ratification to the Association of Southeast Asian Nations (ASEAN) Secretariat.
RCEP agreement includes trade in goods as well as services along with investment access. In addition, it will also boost economic and technical cooperation.
The agreement aims to cut off tariff and non-tariff barriers. Moreover, it will initiate a free trade agreement to form an integrated economic market.
China’s Role in RCEP
Under the RCEP agreement, China will promote foreign trade what with being a market with 65% of the world’s population. Furthermore, the investment volume of China will be an added benefit for the agreement.
Besides, China also offers a sound and lucrative business environment along with technical strength. The RCEP implementation symbolizes a new landmark for China’s opening-up.
Chinese officials stated that under the RCEP China will meet the commitments on service trade opening-up as well as investment negative lists along with ensuring all the measures are put in place.
China will open up 22 more service sectors as per the agreement. This will add to the pre-existing 100-sector commitment to join the World Trade Organization (WTO) two decades ago.
