2 years of RCEP implementation make the region a large market

Building the Regional Comprehensive Economic Partnership (RCEP) trade area into a large and high-level regional market will not only help promote regional and global economic growth but also stabilize the global economy that is facing increasing uncertainties.

The past two years have seen significant growth in trade and investment among RCEP member countries, which has helped further integrate industry and supply chains, thereby promoting overall regional economic integration.

2 years of RCEP implementation make the region a large market

By boosting regional trade, promoting intra-regional investment and further integrating regional industry and supply chains, RCEP has brought significant trade and investment benefits, while boosting regional economic growth.

In fact, RCEP has the potential to significantly boost future trade and investment growth. By focusing on facilitating less developed economies’ participation in the regional market so that they can improve their economic competitiveness, RCEP has already energized the regional market. For example, in 2022, Laos and Myanmar increased their intra-regional trade volume by 28.13% and 13.68% year-on-year, respectively, contributing to GDP growth of 2.7% and 3.8%, respectively.

In addition, the rapid growth of trade and investment between China and ASEAN member countries is the biggest highlight of trade and economic exchanges within the RCEP framework. ASEAN plays a leading role in RCEP, in which China is the most important promoter of the regional free trade agreement.

Trade volume between China and ASEAN in 2023 is expected to increase by 4.9% compared to 2021 - the year before RCEP came into effect. Therefore, it can be expected that increased RCEP trade will further integrate industry and supply chains, accelerating regional economic integration.

Objectively speaking, as some member countries have yet to implement all the provisions of RCEP, it is necessary to ensure that countries can further enhance the vitality of the large regional market of RCEP. The next 5 to 10 years will be a period of rapid economic growth for ASEAN and a crucial period for structural transformation and economic upgrading.

To fully unleash their growth potential, members need to work together to eliminate non-tariff barriers and ensure businesses comply with RCEP rules. The huge market size of the RCEP region, combined with institutional arrangements for trade and investment liberalization and facilitation, will continue to generate tremendous economic growth momentum.

In fact, the International Monetary Fund has predicted that the RCEP region’s GDP could increase by $10.9 trillion between 2023 and 2029, about 1.4 times and 2.6 times the GDP growth of the US and the European Union over the same period.

Focusing on the future and going beyond traditional free trade agreements, RCEP can build the trade area into the largest regional market by helping to further integrate member countries' industries, supply chains and values, aligning rules and standards with those of member countries.

This will promote regional economic integration and build the world’s largest high-level free trade area. Working together to build the world’s most dynamically growing region requires serious implementation and upgrading of RCEP rules. For example, RCEP rules of origin should be upgraded from “partial accumulation” to “full accumulation” and “national tariff reduction” to “unified tariff reduction”.

Source: https://congthuong.vn/2-nam-thuc-thi-rcep-dua-khu-vuc-tro-thanh-thi-truong-lon-323522.html