RCEP: Impetus for ASEAN export growth

The Regional Comprehensive Economic Partnership (RCEP) officially came into effect in early 2022 and is expected to create a new impetus, promoting Vietnam's trade and investment exchanges with ASEAN member states and five other partners, including Australia, New Zealand, Japan, China and South Korea. This opens up new opportunities for Vietnamese businesses in export and economic recovery.

After taking full effect for all signatories, RCEP covers a market of 2.2 billion people, accounting for about 30%  of the world’s population, and a total gross domestic product (GDP) of 26.2 trillion US dollars, equivalent to about 30% of global GDP. This makes RCEP the largest free trade agreement (FTA) in the world. The RCEP Agreement is expected to help create a stable and long-term export market for ASEAN countries in general and Vietnam in particular, contributing to promoting the implementation of the policy of building export-oriented production in Vietnam.

 

After more than eight years of negotiations, with 31 rounds of negotiations, 15 meetings of the trade negotiation committee and 19 rounds of ministerial negotiations, the member countries have finally reached the RCEP agreement. It is considered a comprehensive agreement based on a “tripod” of trade in goods, trade in services and in e-commerce, which is specified in a document of more than 14,000 pages with 20 chapters and appendixes and schedules.

Prime Minister Pham Minh Chinh has an inspection at Nissei Electric Vietnam. Photo: Thanh Chung/VNA

RCEP will eliminate about 92 per cent of import taxes between the signatory countries within 20 years, and establish common rules for e-commerce, commerce and intellectual property rights. RCEP is designed to cut both costs and time for traders by allowing them to export goods to any of the signatory countries, without having to meet the specific requirements of each member country.

 

When the RCEP agreement comes into effect it will help optimize the resources in the region, promote trade facilitation  and investment liberalization, and enhance the level of economic integration. This also promotes economic recovery as well as sustainable prosperity in the region. With a market accounting for 30% of the global population, RCEP will bring an additional 209 billion US dollars annually to global revenue and 500 billion US dollars to world trade by 2030.

 

RCEP’s 15 participants account for nearly 30% of the global GDP. Although tariff liberalization has made significant progress in the past decade for the 15 RCEP members, through an extensive network of FTAs, RCEP will still further reduce tariff barriers. Vietnam is considered a safe and attractive destination.

 

The opportunity to speed up investment attraction from RCEP member countries will be greater, especially when Vietnam is trying to build many mechanisms and policies to catch up with the shifting investment capital. The RCEP agreement will also create a legally binding framework on trade policy, investment,  intellectual property, e-commerce and dispute settlement.

Thanks to the harmonization of rules of origin within the RCEP bloc, Vietnamese goods can more easily meet conditions for enjoying preferential tariffs and increase exports in the region, especially in Japan, South Korea, Australia, and New Zealand.

 

• Story:  Phong Thu & Nguyen Tuoi
• Photos: VNA, AP &AFP