ECONOMY
ANALYSIS
GLOBAL TRADE ASEAN TRADE AGREEMENT
RCEP is considered extremely important because all the 16 countries negotiating the RCEP together account for a third of the world's GDP
RCEP and its impact on global trade IF CORRESPONDENT
On November 15, 2020, 15 countries- including the Association of Southeast Asian Nations (ASEAN) and five regional partners — signed the Regional Comprehensive Economic Partnership (RCEP), arguably the most significant free trade agreement in history. RCEP and the Comprehensive and Brazil is Progressive Agreement for important Trans-Pacific Partnership to the global (CPTPP), which concluded in oil industry 2018 and is also dominated by and will be East Asian members, are the responsible for only major multilateral free the production trade agreements signed in the of nearly 50 Trump era. So what is RCEP? percent of To give a brief introduction, the world’s RCEP is a proposed agreement offshore oil by between the member states of 2040 the Association of Southeast Asian Nations (ASEAN) and its free trade agreement (FTA) partners. The pact covers trade in goods and services, intellectual property, etc. RCEP was introduced during the 19th Asean meet held in November 2011, and the negotiations for the same began during the 21st ASEAN Summit in Cambodia in November 2012. RCEP is considered extremely important because all the 16 countries negotiating the RCEP together account for a third of the world's gross domestic product (GDP) and almost half the
94 | Jan - Feb 2022 | International Finance
world's population, with the combined GDPs of China and India alone making up more than half of that. RCEP's share of the world economy could account for half of the estimated $0.5 quadrillion global (GDP, PPP) by 2050. RCEP aims to create an integrated market in the participating countries, thereby making it easier for products and services of each of these countries to be available across this region. The negotiations will focus on trade in goods and services, investment, intellectual property, dispute settlement, e-commerce, small and medium enterprises, and economic cooperation. RCEP is expected to connect around 30 percent of the world population and its output. And, if this gets the proper political context, RCEP is expected to generate significant gains. According to media reports, RCEP could add $209 billion annually to world incomes and $500 billion to world trade by 2030. Experts also estimate that RCEP and CPTPP together will offset global losses from the U.S.-China trade war, although not for China and the United States. Additionally, the new agreements will make the economies of North and Southeast Asia more efficient, linking their strengths in technology, manufacturing, agriculture, and natural resources.
Countries benefiting from the RCEP agreement As mentioned before, the effects of RCEP is quite impressive even though its agreement is not as
