SINGAPORE, Nov 15, 2020, ST. The world’s largest trade pact was inked on Sunday (Nov 15) by the leaders of 15 countries after eight years of talks, a move seen as a boost for the region as it battles its worst crisis in decades, The Straits Times reported.
The Regional Comprehensive Economic Partnership (RCEP) will open up trade in goods and services, and includes protections in areas like e-commerce and intellectual property.
The participating countries account for 30 per cent of the global economy and one-third of the world’s population.
They comprise all 10 Asean members – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam – and key partners Australia, China, Japan, South Korea and New Zealand.
Speaking at the RCEP leaders summit before the signing, Singapore’s Prime Minister, Mr Lee Hsien Loong, said the agreement is a “major step forward for the world, at a time when multilateralism is losing ground, and global growth is slowing”.
“It signals our collective commitment to maintaining open and connected supply chains, and to promoting freer trade and closer interdependence especially in the face of Covid-19 when countries are turning inwards and are under protectionist pressures,” he added.
PM Lee also noted that the diversity of the participating RCEP countries shows how economies at different stages of development can come together and contribute to each other’s development, as well as to the multilateral trading system.
“This diversity, and the strong links that the participating countries have with the US, Europe and the rest of the world, also reflects the inclusiveness and openness of the agreement,” he added.
PM Lee also expressed hope that India will be able to join the RCEP in the future so that the agreement will “fully reflect the emerging patterns of integration and regional cooperation in Asia”.
Last November, India announced that it would pull out of RCEP negotiations following concerns over trade imbalances. Several Asean leaders have said since that the door will remain open for India to join the trade deal.
The RCEP builds on existing free trade agreements among Asean countries and the five partner countries. It will enter into force once six Asean countries and three partners have ratified the agreement.
Among the key benefits of the agreement include tariff elimination of at least 92 per cent of goods traded among the participating countries, with additional preferential market access for Singapore’s exports, said the Ministry of Trade and Industry (MTI) on Sunday.
The flow of goods will also be faster between countries, with simplified customs procedures and enhanced trade facilitation provisions.
More companies in the services sector will be able to provide their services in participating countries as a foreign supplier, with the increase in foreign shareholding limits for at least 50 sub-sectors including professional services, telecommunications and financial services.
Businesses will also find it easier to navigate and integrate into the regional value chains, as the RCEP establishes a common set of trade rules, said MTI.
Non-traditional areas which are not in some existing agreements, such as e-commerce, competition policy and intellectual property, are also included in the RCEP.
For one, the personal data of consumers will be protected when shopping or carrying out activities online, while electronic signatures and transactions will be more accepted across participating countries.
The agreement also provides for enhanced intellectual property protection and enforcement. For example, Singapore companies will only need to file a single patent or trademark application that would apply in multiple countries, said MTI.
Participating countries have also agreed under the RCEP to publish laws, regulations and procedures relating to government procurement and tender opportunities – a new area of cooperation that is not in any existing Asean agreements.
This will allow greater transparency for businesses to pursue government procurement opportunities in the region, said MTI.
Asean secretary-general Lim Jock Hoi told The Straits Times that the RCEP will ensure that markets are kept open, and provide much needed certainty and stability for businesses as they cope with the Covid-19 crisis.
“One of the lessons learnt from Covid-19 is the need to improve economic resilience and strengthen supply chain connectivity which could be done by, among others, keeping markets open and ensuring the free flow of goods and services especially for those considered as essential,” he said, adding that these are supported by the RCEP.
“The signing of the RCEP agreement at this time when the world is in the midst of an unprecedented challenge brought about by the Covid-19 is a demonstration of the region’s strong commitment to open, inclusive, and rules-based multilateralism and confidence of the contribution of trade to post-pandemic recovery efforts,” he added.