By Nakano Takashi [Singapore] and Kaneko Satsuki
Countries participating in the Regional Comprehensive Economic Partnership (RCEP) are currently completing their internal procedures. Eleven of the 15 countries have already completed or are in the final stage of the process. The agreement’s taking effect in the first half of 2022 has become more of a real possibility. Trade within the Asia-Pacific region is expected to become even more active once the RCEP rules, which gradually eliminate tariffs on 91% of goods, begin to take effect.
Fifteen countries, including Japan, China, South Korea and ASEAN countries, signed the RCEP agreement in November 2020. The agreement will come into effect sixty days after six out of 10 ASEAN countries and three out of the five other countries deposit the agreement with the ASEAN secretariat. Of the 11 countries in the final stages, six have definitely completed the deposition, and the remaining five countries are rushing to complete the procedure. Japan, China, South Korea, and ASEAN countries agreed in September 2021 that each country should accelerate its internal procedures and aim for the agreement taking effect in early January 2022.
Of the 10 ASEAN countries, Singapore, Brunei, Laos, and Cambodia have finished their depositions. Thailand and the Philippines have completed parliamentary approval and presidential ratification of the agreement, and are in the final stages of making deposits. The Myanmar armed forces, which took full control of the country in a coup d’etat, claim to have submitted the ratification document to the ASEAN Secretariat in May 2021. Thus a total of seven ASEAN countries have completed or are about to complete all procedures.
With regard to the five non-ASEAN countries, Japan and China have deposited their ratification documents, and New Zealand and Australia passed before Oct. 25 legislation necessary for ratification. The South Korean government has submitted a bill to ratify RCEP to the National Assembly. It is unclear whether nine countries will complete the deposit by the beginning of November 2021 for RCEP to come into effect in early January 2022. It is highly possible that it will come into effect in the first half of 2022, however.
RCEP is a large free trade agreement (FTA) that covers about 30% of the world’s population and gross domestic product (GDP). Although its level of trade liberalization is lower than that of the Trans-Pacific Partnership (TPP), RCEP has the great advantage of eliminating most tariffs and standardizing investment and intellectual property rules. East Asia, Southeast Asia, and Oceania will be re-recognized as a huge economic zone. RCEP is expected to be effective in promoting imports, exports, and business expansion within the region.