The world’s largest free trade zone is here.
On November 15, the long-mooted Regional Comprehensive Economic Partnership (RCEP) was finally signed.
China, Japan, South Korea, Australia and New Zealand, as well as asean countries represented by Singapore, Thailand and Vietnam, have officially concluded the world’s largest free trade area covering the Asia-Pacific region.
The free trade zone covers 15 countries.Apart from India, which pulled out at the last minute, these 15 countries have a combined population of nearly 2.2 billion, A GDP of 25.6 trillion US dollars and a total foreign trade volume of 10.4 trillion US dollars, accounting for about 30% of the world’s total.
The gold content is also unquestionable.According to an official of the Ministry of Commerce, in terms of trade in goods, the opening level of the RCEP has reached over 90 percent.
“Generally speaking, the high level of free trade agreements is over 95 percent and the low level is over 80 percent.Trade in goods on RCEP has reached over 90%, which is much higher than the level of openness of WTO countries.
This can be seen as a regional upgrade of the WTO.
As the world’s largest free trade area, achieving this goal has not come easily.The RCEP negotiations, which were formally launched in 2012, are now eight years overdue.
Every negotiation over the past eight years has been stymied by various interests.
This time, coincides with the aftermath of the ELECTION dispute in the United States, the pandemic in Europe and the United States has not substantially eased, the international focus has shifted, can be said to be a rare opportunity.
After all, in the past eight years and more, the international environment has become increasingly complicated.Global trade disputes are intensifying, geopolitical conflicts are continuing, the tide of anti-globalization is accelerating, and unilateralism and protectionism is rife…In the face of all these obstacles, it is not easy for the RCEP to settle.
In the context of global trade protectionism, it is tantamount to an important round for globalization.
For China, this is another huge leap forward since it joined the WTO in 2001.
China’s economic take-off over the past 20 years has something to do with the WTO.
China’s accession to the WTO has brought China a rare period of strategic opportunities for globalization. It has not only laid the foundation for the rise of the foreign trade economy, but also made a number of coastal cities stand out from the rest. Moreover, China has taken advantage of the opportunity to become the “factory of the world”, the world’s largest goods trader, and the rise of a manufacturing power.
Today, globalisation is bucking the trend and the WTO’s role is increasingly limited.
Against this background, the launch of RCEP, the largest FREE trade area in the Asia-Pacific region, has undoubtedly dealt a blow to unilateralism and trade protectionism and become an important symbol of globalization.
In reality, As the world’s largest manufacturing country, the largest foreign trade country and the second largest foreign investor, the arrival of the FTAAP will undoubtedly further stimulate China’s exports.
Of course, it will also boost China’s imports of resources and raw materials in manufacturing and other related fields. At the same time, it will provide Chinese enterprises with greater market space for overseas investment and transfer of backward production capacity, and provide support for realizing the strategic layout of “double cycle”.
More importantly, the RCEP has come to a head, providing China with a counterweight to the US-led TRANS-PACIFIC Partnership.
The TPP, led by the United States and formally launched as early as 2015, covers 12 countries including the United States, Japan, Malaysia, Australia, New Zealand, Canada and Mexico, with China excluded.
Later, when Trump took office, he embarked on a “great retreat”, trying to replace the previous multilateral relationship with bilateral relations and abandoning globalization.
When Trump started a massive trade war with many countries, the TPP had to die and degenerate into a formless CPTPP (Comprehensive and Progressive Trans-Pacific Partnership).
Now the us election is about to become clear.Once Mr Biden is in office, America is more likely to regroup than ever before, and it is not impossible for TPP to sweep back into the fold.
In the future, there will be no place for China in the US-led TPP. To compete with it, only one RCEP may not be enough. Breakthroughs are needed in the China-Japan-ROK FTA and the China-Eu FTA.
How far is the China-Japan-ROK FTA?
As early as 2002, the concept of a China-Japan-ROK FREE Trade Area was put forward. Although the three parties have sufficient will and both the government and the people are happy to see its success, the fta has yet to be put into practice after 16 rounds of negotiations.
As anyone familiar with the international situation knows, every time an agreement is about to be signed, some international dispute breaks out and suspends the agreement.From the Diaoyu Islands incident to the THAAD incident to the Trade war between Japan and the ROK, there are always various interests blocking the conclusion of the trilateral agreement.
This time, the signing of the RCEP, despite the fact that the China-Japan-ROK FTA has made critical progress within the framework of the ASIA-PACIFIC Free Trade Area.
However, the RCEP is far from a substitute for the CHINA-Japan-ROK FTA. After all, the RCEP involves as many as 15 countries, including China, a country with a large population, Brunei, a developed country such as Japan and a poor country such as Cambodia. There are bound to be various compromises.
On the other hand, the Fta between China, Japan and the ROK is of more practical significance.
China is the largest trading nation of Japan and the ROK, while Japan and the ROK are China’s second and third largest trading partners and the largest and second largest source of investment respectively. The three countries have frequent trade exchanges.
At the same time, Japan has relatively rich capital and cutting-edge technology, South Korea is a newly industrialized country with advantages in the field of semiconductors, while China is a manufacturing power. The three countries have complementary economic industries and highly integrated industrial chains. A free trade zone can achieve win-win results for all parties.
At the same time, China, Japan and the ROK are the world’s second, third and 11th largest economies respectively. Their COMBINED GDP exceeds us $21 trillion, accounting for over 20% of the world’s total.Our foreign trade exceeded us $7 trillion, accounting for 20% of global trade.
Once the china-Japan-ROK FREE trade area is formed, there will be more capital for negotiation and game with other major countries in the world, and its significance is inestimable.
To say the least, even if these ambitious goals cannot be achieved quickly, they will contribute to China’s balanced regional development at least in the short term.
Shandong, Liaoning and other provinces will be the biggest beneficiaries of the fta, giving a boost to the struggling northern region.
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