January 02, 2022 20:51 PM
Regional Comprehensive Economic Partnership-RCEP
[International Comprehensive News]In the early morning of January 1, 2022, the Regional Comprehensive Economic Partnership (RCEP) formally came into effect, and the world’s largest free trade zone officially set sail. RCEP currently has 15 member states, including 5 countries including China, Japan, South Korea, Australia, New Zealand and 10 ASEAN countries. According to the relevant provisions of the RECP agreement, 6 ASEAN member states and 3 non-ASEAN member states formally submit the approval letter, which means that the threshold for the agreement to enter into force has been reached. Through the efforts of all parties, RCEP will reach the entry into force threshold on November 2, 2021.
Starting from January 1, 2022, RCEP has officially entered into force for 10 countries including Brunei, Cambodia, Laos, Singapore, Thailand, Vietnam, China, Japan, New Zealand and Australia. South Korea will join the effective implementation on February 1. The remaining member states will also take effect one following another following completing the domestic approval procedures.
RCEP covers a market of 2.2 billion people, accounting for regarding 30% of the world’s total population, with a GDP of US$25.6 trillion, accounting for 29.3% of the global total, and intraregional trade of US$10.4 trillion, accounting for 27.4% of the global trade.In addition, the agreement is larger than other regional trade groups, such as the United States-Mexico-Canada (USMCA) and EU agreements
China will also work with RCEP members to actively participate in and support the construction of the RCEP mechanism and make it the main platform for East Asian economic and trade cooperation. After the RCEP takes effect, more than 90% of the goods trade between approved member states will eventually achieve zero tariffs. On the day the agreement takes effect, the immediate zero-tariff ratio between China and ASEAN, Australia and New Zealand will exceed 65%. It’s not just regarding lowering tariffs. RCEP has also formed uniform rules in terms of rules of origin, customs procedures, inspection and quarantine, etc., and the degree of facilitation of intraregional trade will be further improved.
The entry into force of RCEP will effectively promote regional economic integration and post-epidemic economic recovery and growth. RCEP will strongly promote trade, investment and economic development among the 15 member states, and promote the recovery of the global economy following the epidemic. The UNCTAD research report shows that by 2025, RCEP will bring more than 10% to the export growth of 15 member countries.
It’s not just regarding lowering tariffs. RCEP has also formed uniform rules in terms of rules of origin, customs procedures, inspection and quarantine, etc., and the degree of facilitation of intraregional trade will be further improved.
In addition to trade in goods, RCEP member countries have also made high-level openness commitments in service trade and investment, and established high-level intellectual property rights, e-commerce and other rules. The flow of various economic factors will be smoother, and the industrial chain and supply chain within the region And the value chain will be further consolidated and developed.
The effective date of RCEP fully demonstrates the confidence and determination of all parties to jointly safeguard multilateralism and free trade, and promote regional economic integration, and will make important contributions to regional and global trade and investment growth, economic recovery and prosperity.
According to the results of the Indonesian Ministry of Finance’s review of the impact of RCEP on the Indonesian economy in 2019, RCEP’s contribution to the growth of Indonesia’s GDP from 2021 to 2032 is only 0.05%, which is much smaller than other RCEP countries, such as Vietnam’s 0.66% and South Korea. 0.51%, Malaysia 0.35% and Thailand 0.21%.
However, Indonesia must participate in RCEP and make structural adjustments to domestic small and medium-sized enterprises to improve production efficiency and strengthen competitiveness, because according to the Ministry of Finance research, if Indonesia chooses not to join RCEP, it will have a negative 0.07% impact on Indonesia’s economic growth. .
Minister of Maritime Affairs and Investment Coordination Luhut Pandjaitan (Luhut Pandjaitan) said that the new crown Omicron mutant strain (omicron), which was first discovered in South Africa in November last year, is the key to my country’s economic recovery in 2022. The spread of this variant may slow down our country’s economic recovery. The Omi Keron mutant strain has caused concerns and heightened vigilance in many countries. It is hoped that following my country’s accession to RCEP, it can help increase the country’s economic growth rate, not only contributing 0.05%, but higher, at least not lower than that of other RCEP countries. The government needs to introduce the right policy tools as enforceable regulations so that any international agreement will always benefit our country. Ruhut added.
Previously, Nevi Zuairina, a member of the Justice and Welfare Party (PKS) Congress, reminded that following RCEP takes effect, goods from abroad will flow freely. This situation will cause domestic small and medium enterprises (UMKM) to face very fierce competition. “I ask the government to formulate regulations and plans on how to improve the production efficiency of domestic SMEs and optimize the human resource management capabilities of SMEs, so that domestic SME participants can stand out from the fierce competition in their own countries, continue to survive and thrive. Grow.” Nevi Zuairina said. (V)
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