The Regional Comprehensive Economic Partnership (RCEP) free trade agreement, which entered into force on Jan. 1, 2022, will inject a new impetus into regional economic growth in the long term, experts said on Wednesday.
RCEP comprises 15 Asia-Pacific countries including 10 ASEAN (the Association of Southeast Asian Nations) members, i.e. Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, and five trading partners, namely China, Japan, South Korea, Australia and New Zealand.
"We expect the RCEP agreement to have an overall positive impact on the medium to long term economic growth of the ASEAN+3 (China, Japan and South Korea) and the rest of the bloc, with three potential benefits from its key provisions," Hoe Ee Khor, chief economist of the ASEAN+3 Macroeconomic Research Office (AMRO), told Xinhua in an e-mail.
He said the first benefit would come from the elimination of tariffs on more than 90 percent of goods traded within the bloc over the next two decades.
The second benefit would come from efficiency gains from a consolidated trade rulebook and harmonized and more accommodating rules of origin, which will allow multinational enterprises to leverage the comparative advantages of different economies in ASEAN+3 to lower their cost of production, Khor said.
The third benefit is RCEP's potential boost to cross border services trade from the further liberalization of selected sectors such as telecommunications and financial services together with provisions on easier labor mobility and on e-commerce and digital trade, he added.
"At the country level, individual ASEAN+3 economies will reap different benefits, and in different ways," he said. "RCEP tariff reductions, for example, will mainly benefit the Plus 3 economies (China, Japan and South Korea)."
Khor said ASEAN would enjoy immediate efficiency gains and lower costs of production from RCEP's consolidated set of rules on trade and customs practices.
"ASEAN economies are also expected to benefit from higher investment flows from the expansion of regional supply chains within the bloc over the medium term," he said.
Kin Phea, director-general of the International Relations Institute at the Royal Academy of Cambodia, said RCEP is multilateral trade cooperation and its structure is truly meant to benefit all participating countries as all will be governed under the same trade rules.
"RCEP is the most ambitious regional free trade agreement in Asia in which China has played a vital role in converting Asian economy into a core economic polar aimed at averting protectionism and the widespread negative impacts of the trade war," he told Xinhua.
"This mega-regional trade pact is instrumental in subverting creeping unilateralism because it pulls all bilateral free trade agreements into one economic sphere, under one blanket trade ruling," Phea added.
Senior economist Ky Sereyvath, director-general of the Institute of China Studies at the Royal Academy of Cambodia, said RCEP has served as a catalyst for regional and global economic growth.
"I believe that this trade pact will become a new center of gravity for global trade in the future," he said.
