RCEP will facilitate Northeast Asian supply chain integration

 The world's largest free trade agreement, the "Regional Comprehensive Economic Partnership," came into effect on January 1 this year for Brunei, Cambodia, Laos, Singapore, Thailand, Vietnam, China, Japan, New Zealand, and Australia. The Relationship Agreement (RCEP) will come into effect for South Korea on February 1. Malaysia has also completed the RCEP approval process, which will come into effect on March 18. The entry into force of RCEP as scheduled is a major development in the regional economic integration of East Asia, which will effectively boost the growth of regional trade and investment, promote regional economic recovery, and inject impetus into global economic development.

RCEP

  First of all, it shows that regional economic openness and cooperation are in line with the global development trend. The speedy completion of the RCEP approval process is a true reflection of the major member states' joint efforts to build a fair, open multilateral trading system that benefits the region and the world, and is a response to the huge negative impact of the COVID-19 pandemic. The strong response also demonstrated the common aspirations and eager expectations of countries in the region to expand opening up and carry out international cooperation.

RCEP member states have sent a strong signal to the world to oppose unilateralism and trade protectionism, support free trade and safeguard the multilateral trading system with their firm implementation of the treaty. Free trade has strong vitality, and trade decoupling and beggar-thy-neighbor anti-globalization are not in line with the trend of the times for global development. RCEP is linked with WTO rules, focuses on realizing extensive trade liberalization, effectively optimizes and integrates economic and trade rules within the region, and will further play a role in promoting the construction of a global multilateral free trade framework through regional cooperation.

  Secondly, it shows the inclusiveness, flexibility and openness of RCEP. Compared with other free trade agreements, RCEP is more inclusive. It covers not only traditional issues such as trade in goods, dispute settlement, trade in services, and investment, but also new issues such as intellectual property rights, digital trade, finance, and telecommunications. Its level of openness to trade in goods will be higher than the WTO's open standards.

                                                                   WTO

  The entry into force of the RCEP also complies with the previously proposed approval principle. It does not require the simultaneous approval of the legislative bodies of 15 countries. As long as the legislative systems of 9 countries sign it, it will take effect, which reflects the unique flexibility of the agreement. During the negotiation process, RCEP did not adopt a "one-size-fits-all" approach to require all member states to open up unified standards. Instead, it took into account the different development stages and interest demands of countries and made flexible transitional arrangements for the rules. To measure whether an international rule is fair, advanced and scientific, not only whether it represents the interests of most countries, but also whether the interests of relatively weak countries can be effectively protected.

Once again, the positive effects after taking effect are huge. RCEP will end the unbalanced state of "mature production network, close intra-regional trade" and "lack of overall economic cooperation institutional arrangements" in East Asia for a long time. On the whole, after the RCEP takes effect, more than 90% of the trade in goods in the region will eventually achieve zero tariffs, which will not only significantly boost the overall economic, trade and investment growth in the region, but also positively promote the growth of global trade and welfare. effect.

The United Nations Conference on Trade and Development estimated the economic effects of RCEP in December last year, predicting that intra-regional trade will increase by about US$42 billion, and believes that East Asia "will become the new center of global trade." The simulation forecast results of the "Report on the Impact of RCEP on Regional Economy" released by the Institute of International Trade and Economic Cooperation of the Ministry of Commerce of China show that by 2035, RCEP will drive the cumulative incremental scale of regional exports and imports to US$857.1 billion and US$983.7 billion respectively. , the regional investment will increase by 1.47%, and the regional economic welfare will increase by 250.3 billion US dollars. At the global level, by 2035, RCEP will drive the world's real GDP and import and export trade to increase by 0.12% and 2.91%, respectively, compared with the baseline scenario.

                                                                 UN

 In particular, the rules of accumulation of origin allow enterprises in the region to obtain preferential tariffs and lower non-tariff barriers between member countries, and to reasonably arrange investment and production plans under relatively stable development expectations to reduce the supply and demand gap. It will reduce the impact of commodity price fluctuations, thereby enhancing the stability of the industrial chain, supply chain and value chain in the region, and playing the role of a "stabilizer" for the development of the world industrial chain.

 More importantly, RCEP realized the first free trade relationship between China, Japan and South Korea, and RCEP enabled China, Japan, Japan and South Korea to establish a free trade area relationship for the first time. This is a historic breakthrough and will help promote the freedom of China, Japan and South Korea. Substantial progress has been made in trade negotiations and is expected to boost trade and supply chain integration in Northeast Asia. From the perspective of changes in the economic and trade relations between the three countries, according to Annex I of RCEP, "China's Tariff Commitment to Japan", 25% of Japanese products will be directly reduced to zero tariff when the agreement takes effect, and the proportion of China's tariff-free products to Japan will be reduced from the original. 8.02% expanded to 86%. At the same time, Japan's tariff-free ratio for Chinese products will also reach 86%. China and South Korea immediately dropped to 38.6% of zero-tariff goods, and finally zero-tariff goods accounted for 86%. For Japan-South Korea trade, the proportion of duty-free goods exported from Japan to South Korea will also increase from 19% to 92%.

 In general, the industrial chain and value chain between the three countries will further deepen the integration, the degree of trade facilitation and investment liberalization will be significantly improved, and the flow of core elements such as commodities, capital, talents, and technology among countries will be promoted. Both trade and the process of regional economic integration will have great impetus.