Although 2020 will likely go down as the year of COVID for many western countries, if we look back many years from now, Asia will probably remember 2020 as the beginning of RCEP.
The Regional Comprehensive Economic Partnership (RCEP) consists of 10 Southeast Asian countries and South Korea, China, Japan, Australia, and New Zealand. Their combined GDP totals roughly $26 trillion, and they account for nearly 28% of global trade (based on 2019 data). RCEP affects 2.2 billion people or almost 30% of the world’s population. It is the world’s largest free trade agreement.
RCEP marks the beginning of economic integration and restructuring in the APAC region and will reshape and create the world’s largest geo-economic zone. In the not so distant past, the largest trade and investment partner of all the countries in RCEP is not in the region. Within a decade, many experts project all RCEP counties’ largest trade and investment partner within the RCEP region.
Unlike other FTA, which usually focus heavily on lowing tariffs and IP protection, RCEP focuses more on collaborating on standardization and the flow of goods and labor. For example, RCEP will cut custom approval time for cross-border partials from 48 hours to 6 hours. You can find similar perversion for labor visas.
There is also a dedicated section in RCEP that promotes cross-border eCommerce within the region. RCEP reassures that there will be no tariffs on eCommerce and will have unified laws and regulations for cross-border eCommerce and cross-border consumer protection. Regional cross-border eCommerce integration will accelerate, and the regional industrial supply chains will be strengthened. The need for digital solutions to help cross-border industrial supply chain integration will grow. Overall, cross-border B2B and B2C services will boom in the coming decade.
We expect this to be a trending topic among eCommerce media next year as China work towards ratifying RCEP. We here at IM will continue to monitor its development and impact.
If you would like to know more about how RCEP will affect your business in China, shoot Dijia an email at dijia@inmatt.com.
