The Comprehensive Regional Economic Partnership Agreement, signed by 15 Asia-Pacific countries in November last year, will enter into force on January 1 in 10 countries, RCEP signatory members who have already completed ratification procedures.
The agreement brought together the 10 member states of the Association of Southeast Asian Nations － or ASEAN including Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore , Thailand and Vietnam － and China, Japan, South Korea, Australia and New Zealand, to create the largest free trade bloc in the world.
The implementation of the agreement, a big step forward towards regional economic integration, is expected to give new impetus to economic growth in member economies.
For China, the agreement will facilitate the establishment of the new dual circulation development model, which takes the domestic market as a pillar while letting the domestic and foreign markets strengthen each other, as it contains high opening commitments. level by member countries for both trade and investment.
Designed to eliminate tariffs on up to 90% of goods traded between its signatories over the next 20 years once it enters into force, the RCEP agreement also has a high level of liberalization and facilitation for investment and trade in services.
Full implementation of the RCEP agreement will bring zero tariff treatment to nearly 30% of Chinese exports. The deal will also provide more opportunities for Chinese companies to invest in related economies, according to estimates from the Commerce Ministry.
In 2020, China’s exports to RCEP members exceeded $ 700 billion, accounting for 27 percent of the country’s total exports.
Chinese imports from the RCEP region were about $ 778 billion, or about 38% of China’s total imports.
Besides, the implementation of the RCEP agreement will also reshape economic relations between China and Japan, through the formation of direct free trade relations between the two for the first time.
The implementation of the RCEP agreement will allow China and Japan to mutually benefit from reduced tariffs on products such as machinery, electronic information technology and chemicals.
Under the RCEP agreement, ASEAN member states will also significantly extend duty-free treatment to Chinese products.
ASEAN member states such as Indonesia, Philippines, Cambodia, Myanmar and Malaysia to expand their tariff reduction schedules for Chinese products including automobiles, auto parts, motorcycles, chemicals , electromechanical products and steel products.
Chinese enterprises will also be able to reduce import costs related to advanced technologies, key equipment, key components, consumer goods, pharmaceuticals and medical devices, as well as production services such as design, research and development, energy conservation and environmental protection, to better meet national needs. market needs for consumption updates.
ASEAN has launched and led efforts towards the implementation of the free trade agreement, also at a time when things are difficult for international trade due to challenges related to COVID-19. But all Chinese companies are likely to welcome the upcoming implementation of the RCEP deal.
The same goes for Christmas and New Year’s revelers who might appreciate the prospect that the prices of Japanese sake imported into China could drop significantly, as tariffs will be reduced by 40%, thanks to RCEP.