shine trader limited reports:
The governments of New Zealand and Australia announced on the 3rd that they had completed the domestic approval procedures of the regional comprehensive economic partnership agreement (RCEP). This indicates that the “milestone” conditions for the entry into force of RCEP have been met. On November 2, the ASEAN Secretariat, the custodian of RCEP, issued a notice announcing that six ASEAN member states including Brunei, Cambodia, Laos, Singapore, Thailand and Vietnam and four non ASEAN member states such as China, Japan, New Zealand and Australia have officially submitted a letter of approval to the Secretary General of ASEAN, reaching the threshold for the entry into force of the agreement, the Ministry of Commerce said on the evening of November 3. According to the agreement, RCEP will enter into force for the above ten countries on January 1, 2022.
RCEP negotiations were initiated by 10 ASEAN countries in 2012 and six dialogue partner countries including Australia, China, India, Japan, South Korea and New Zealand were invited to participate. The third RCEP leaders’ meeting was held in Bangkok, Thailand, in November 2019 and issued a joint statement, announcing that the 15 countries except India would conclude all text negotiations and virtually all market access negotiations. In November 2020, 15 RCEP Member States officially signed the agreement. According to the agreement, RCEP can enter into force among six ASEAN Member States and three non ASEAN Member States after they are ratified.
Source: visual China
On March 22 this year, the head of the International Department of the Ministry of Commerce of China said that China had completed the approval of the RCEP agreement and became the first country to ratify the agreement. On April 15, China officially deposited the RCEP approval letter with the Secretary General of ASEAN, marking that China has officially completed the RCEP approval procedure. On April 28, the plenary session of the Japanese Senate adopted RCEP.
New Zealand’s Ministry of Trade issued a statement on the 3rd, announcing that the country has approved RCEP, “from the beginning of next year, enterprises will be able to take advantage of RCEP opportunities”. The Australian Ministry of foreign affairs and trade also issued a statement saying that RCEP will enter into force on January 1 next year because Australia and New Zealand have completed the ratification procedures of the agreement. “RCEP will enter into force 60 days after ratification by at least 6 ASEAN countries and at least 3 non ASEAN countries. This milestone (condition) has been reached on November 2, 2021, and RCEP has been approved by Australia and New Zealand, paving the way for its entry into force on January 1, 2022,” the statement said, “Australia has ratified RCEP to ensure that our farmers and enterprises can benefit from the world’s largest free trade agreement.”
Japan’s Kyodo news agency said on the 3rd that although there is no United States, RCEP is still the largest free trade agreement in the world. “This will also be the first trade agreement including China and South Korea that Japan has joined.” The Japanese government estimates that RCEP can increase Japan’s GDP by about 2.7%. It is reported that RCEP aims to eliminate 91% of commodity tariffs among member countries and standardize trade rules such as investment, intellectual property rights and e-commerce.
“The world’s largest trade agreement will come into force in January next year, and the United States will not participate,” the US CNBC website said on the 3rd. RCEP covers the global population of 2.2 billion and the output market of 26.2 trillion US dollars. The partnership will create a trade group covering about 30% of the global population and the global economy, which is better than the US Mexico Canada agreement (usmca) And other regional trade groups such as the European Union. The report also said sourly that analysts said that RCEP’s economic benefits are small and will take several years to achieve. “Nevertheless, at a time when the economic influence of the United States in the Asia Pacific region has weakened, the agreement is still widely regarded as China’s geopolitical victory.”
Nikkei Asia review RCEP will create a super large trading group covering about 30% of the world’s GDP and population, it said on the 3rd. Once it comes into force, the agreement will eliminate about 90% of commodity trade tariffs between signatory countries in the next 20 years. For enterprises around the world, RCEP may become an incentive for investors to invest in member countries. Enterprises can exempt taxes from markets such as China, South Korea and Japan Exporting products and manufacturing products in member countries with relatively cheap labor force will greatly offset the additional logistics costs. It is reported that the uniqueness of RCEP is that it is the only multilateral free trade agreement that includes China. “But this situation may change soon, because Beijing has officially submitted to join the comprehensive and progressive trans Pacific partnership agreement (cptpp) “it is reported that the trade rules of cptpp are much freer than RCEP, so it is very important for RCEP to be approved and enter into force quickly.” if China finally becomes a member of cptpp, the two agreements may begin to become similar.
Reprint indicated source：Spark Global Limited information