Special RCEP Agreement Summary Trade Update – 15 Nov 2020
Weekly trade review provided by Chatto Creek Advisory Pty.
Chatto Creek Advisory Pty Ltd is a Melbourne-based strategic consultancy specialising in trade policy advice and government engagement strategy. It is headed by Russell Scoular, an executive with rich government relations, trade policy, and business experience throughout the Asia Pacific.
LEADERS SIGN HUGE TRADE AGREEMENT
Leaders from RCEP (ASEAN + Australia, China, Japan, South Korea and New Zealand) met virtually today for the signing of the Regional Comprehensive Economic Partnership Agreement. The 15 economies cover a market of 2.2b people and 30% of the world’s GDP.
WHAT IS COVERED BY RCEP
RCEP has 20 Chapters, 17 Annexes and 54 schedules covering such topics as market access, rules of origin, customs procedures, technical standards, services trade, trade remedies, investment, IP, e-commerce, government procurement and support for MSME businesses.
A LONG NEGOTIATING JOURNEY
RCEP began in Cambodia in November 2012. The first negotiating round was held in May 2013. Thirty-one negotiating rounds were held before agreement was reached for the world’s largest trade agreement. A number of leader and ministerial summits were also held.
A 2021 START IS POSSIBLE
The RCEP Agreement is likely to enter into force in late 2021 at the earliest as participating economies must now complete their domestic ratification processes. It will enter into force once at least six ASEAN economies and three non-ASEAN states complete their ratifications.
INDIA CAN RETURN
India will be able to re-join RCEP from its entry into force. India was an original negotiating economy but withdrew in November 2019 primarily over concerns related to the opening of its market to China. RCEP will also be open to other new members 18 months after it begins.
WHAT SOME LEADERS WERE SAYING ABOUT THE WORLD’S LARGEST TRADE AGREEMENT:
Australia: PM Morrison said RCEP would open new doors for Australian farmers and for businesses, particularly in the services sector. It would be crucial as Australia and the region began to rebuild from COVID-19. Trade Minister Birmingham said RCEP could not have come at a more important time.
New Zealand: Prime Minister Ardern said RCEP would help put New Zealand in the best possible position to recover from the economic impacts of COVID-19 and to help it seize new opportunities for exports and investment.
ASEAN: Secretary-General Dato Lim Jock Hoi described the signing of RCEP as an historic event for ASEAN which would provide a much-needed boost for a swift and robust recovery from the COVID-19 pandemic. RCEP would over time see tariffs and quotas eliminated in over 65% of traded goods.
Philippines: Trade Secretary Lopez said RCEP would broaden the Philippines’ economic engagement with its trading partners through improved trade and investment, enhanced transparency, integrated supply chains and strengthened co-operation.