RCEP expected to effectively boost economic recovery

The imminent implementation of the Regional Comprehensive Economic Partnership agreement, scheduled to take effect from Jan 1, will effectively boost economic recovery and consolidate the supply chain network in the Asia-Pacific region, economists and business leaders said on Thursday.

The Secretariat of the Association of Southeast Asian Nations has confirmed that six member countries of the bloc and four non-ASEAN countries-China, Japan, New Zealand and Australia-had formally submitted their RCEP ratifications, meeting the conditions for the deal to come into force in those 10 countries at the start of next year, China's Ministry of Commerce said in an online statement on Wednesday.

Apart from showing their willingness to further expand trade flows during the post COVID-19 era, the RCEP-the world's biggest trade pact by GDP-will help these signatory countries ensure the opening of their markets as well as uninterrupted supply chains in the Asia-Pacific region, said Zhang Jianping, director-general of the China Center for Regional Economic Cooperation in Beijing.

The six ASEAN countries that have approved the RCEP are Myanmar, Cambodia, Laos, Singapore, Thailand and Vietnam. The deal comes into force 60 days after ratification by at least six ASEAN countries and at least three non-ASEAN countries, according to the agreement signed in November last year.

As of Wednesday, four ASEAN members and the Republic of Korea haven't ratified the dealt.

Once the RCEP takes effect, local and global companies will enjoy a regional business environment with fewer investment barriers and low tariffs. The implementation of the agreement will help the regional supply chain better respond to external impacts, said Jiang Feng, director of the General Administration of Customs' Department of Duty Collection.

China's foreign trade soared by 22.7 percent on a yearly basis to 28.33 trillion yuan ($4.4 trillion) in the first three quarters of this year, and the volume of its exports and imports with other RCEP participants surged 19.3 percent year-on-year, data from the administration showed.

China, one of the main drivers of the deal, completed the ratification process for the agreement on April 15 and applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, another trade agreement among 11 economies, including Australia, Canada and Japan, in September.

"In the next growth stage, innovations in trade policies, products and practices will be the cornerstones of progress for China and its partners to persevere on the path of development," said Lawrence Loh, director of the Center for Governance and Sustainability at the National University of Singapore's Business School.

Despite the adverse effects of the COVID-19 pandemic on the region's economic growth, the RCEP will pave the way for global companies to invest and export more products to various markets within the region, said Donny Yu, president and CEO for China at Nexans SA, a French cable manufacturer for power and data transmission.