RCEP: Historic milestone for ASEAN centrality
By Deng Xijun, Ambassador of the People Republic of China to ASEAN
On November 15, Leaders of the 15 participating countries in the Regional Comprehensive Economic Partnership (RCEP) held the fourth RCEP Summit via video conference. The Leaders subsequently attended and witnessed the online signing ceremony of the RCEP agreement. The Summit issued a Joint Leaders' Statement on RCEP with all Leaders highly praising the signing of the historic pact.
As Chinese Premier of the State Council Li Keqiang pointed out, the signing of RCEP represents not only a landmark achievement of East Asia regional cooperation, but also a victory of multilateralism and free trade. The signing offers a ray of light and hope to people facing the gloomy international landscape and shows that multilateralism and free trade is the right way forward for the world economy and human civilization. The agreement will definitely inject new energy into promoting regional development and prosperity, and emerge as a fresh force for restoring global economic growth. The signing of the RCEP Agreement is one of the most significant, most awaited and most exciting outcomes of the ASEAN Summit and Related Meetings this year. It went through eight years of arduous and intensive negotiations, overcame all the difficulties and was finally signed during this summit. In November 2019, against the backdrop of mounting downward pressure on the global economy and the spread of unilateralism and protectionism, we were pleased to see that the RCEP negotiations were concluded in general. The tasks before the signing were still considerable, including legal scrubbing of the full text and remaining bilateral market access negotiations.
The outbreak of COVID-19 has certainly posed new difficulties and challenges to this work. However, the pandemic has not shaken the confidence and determination of all the 15 parties to complete the RCEP. Instead, it has made all parties more aware of the great impetus and significance of RCEP for promoting regional economic recovery and mutually beneficial cooperation, and has raised the sense of urgency for the timely signing of RCEP. The RCEP participating countries acted with solidarity and worked hard to advance remaining job via video conference this year. At the end, all remaining issues had been resolved successfully, which secured the signing of RCEP as scheduled.
Why is RCEP so significant and unprecedented? First, it is the largest free trade agreement in the world, with a market of 2.2 billion people (almost 30% of the world’s population), a combined GDP of US$ 26.2 trillion (about 30% of global GDP) and nearly 28% of global trade. This means RCEP has huge and incomparable impact on the world economy and global trading rules compared to other FTAs. Second, RCEP comprises a diverse mix of developed, developing and least developed economies. The countries bear various development levels, cultural backgrounds and political systems, etc. The fact that such variety of countries could unite and reach a pact, demonstrates the tremendous appeal of free trade and win-win cooperation.
The RCEP agreement is a modern, comprehensive, high-quality and mutually beneficial agreement. It contains 20 chapters, and is up to over 14,000 pages with the annexes and market access schedules. It includes areas and disciplines that were not previously covered in the existing free trade agreements between ASEAN and non-ASEAN countries participating in RCEP. Aside from the specific provisions that cover trade in goods and services, and investment, RCEP also includes chapters on new areas such as intellectual property, electronic commerce, competition, small and medium enterprises (SMEs), economic and technical cooperation and government procurement. These commitments will open a vast range of opportunities for businesses located in the region, facilitate smooth flow of goods, services and personnel, form unified regional economic and trading rules, improve the overall regional business environment, reduce enterprises’ trade costs and operating costs, and promote the optimal allocation of resources and rational distribution of industries within the region. At the same time, it will help provide more colorful, high-quality and less costly goods and services for people of all countries, and enhance their sense of gain and happiness.
In my view, the successful signing of RCEP marks a new leap towards the major economic and trade framework in the Asia-Pacific region. It is a major victory for multilateralism and free trade, and a major boost to regional and global economic recovery under the new normal of COVID-19 situation. The signing itself has given a strong shot in the arm to regional and global economic recovery, set an example on a global scale, and sent a powerful message to the world: in order to defeat COVID-19 and promote recovery, we must adhere to and rely on international cooperation. Once the RCEP enters info force, its dividends will be more visible and lasting. It will promote trade and investment growth and regional economic integration in the Asia-Pacific, strengthen stability and connectivity of regional industrial chains and supply chains, increase employment, and spur economic growth. It will show support to the open, inclusive and rule-based multilateral trading system, boost global economic confidence, and contribute to regional and global economic recovery and development.
The RCEP agreement is the most ambitious free trade agreement initiated by ASEAN, which contributes to enhancing ASEAN centrality in regional frameworks and strengthening ASEAN cooperation with regional partners including China. China appreciates and thanks ASEAN for its superb leadership and tremendous hard work in advancing the RCEP process. Before the RCEP, ASEAN and the other five parties have established 10+1 FTA respectively. With the great vision of achieving broader regional economic integration, ASEAN put forward the proposal to establish the RCEP. Over the past eight years, ASEAN has maintained its role as a leader, actively pushed forward the negotiation process, coordinated the positions of all parties, and ensured that the momentum of the negotiations was always sufficient. The ASEAN Secretariat has also provided excellent assistance along the way. It was ASEAN's centrality and enormous efforts that enabled so many countries to overcome their political, economic and cultural diversity and finally reach consensus. This agreement cannot come into being without ASEAN leadership.
China has always upheld ASEAN's centrality, given strong support to ASEAN, and played a positive and constructive role in the RCEP negotiations. Chinese President Xi Jinping called on all relevant parties to conclude the RCEP agreement at an early date at China International Import Expo (CIIE) and on other important occasions, and had in-depth exchanges of views with leaders of relevant countries on RCEP. Chinese Premier Li Keqiang has attended the RCEP Summit for four consecutive years and expounded China's propositions and views on promoting the early conclusion of RCEP. China has participated in all ministerial-level negotiations and technical negotiations, hosted some of the meetings, and made active contributions in the spirit of promoting dialogue, cooperation and success. In the first half of this year, China has completed all substantive negotiations involving China, leading the way among the members and laying a solid foundation for the signing of the RCEP as scheduled.
The opportunities accruing from the RCEP Agreement and its full potential can only be realised once the Agreement enters into force. So the priority task for all parties is to ensure RCEP enters into force at an early date. As the next step, the 15 parties will fulfill domestic ratification procedures. When at least six ASEAN Member States and three non-ASEAN signatories deposit their instrument of ratification, acceptance or approval with the Agreement’s Depositary, RCEP will enter into force.
As indicated in the Joint Leaders’ Statement, RCEP is an open and inclusive agreement. The Leaders highly value India’s role in RCEP as one original participating country and its strategic importance as a regional partner in creating deeper and expanded regional value chains. In this regard, they reiterate that the RCEP remains open to India and India’s accession to RCEP would be welcome.
In the future, as the potential of the RCEP continues to be unleashed, it may attract more countries to take part. This would be conducive to trade and investment liberalization and facilitation in a larger scope. I also hope that the RCEP, as a major pathway, will make an important contribution to the eventual realization of the Free Trade Area of Asia-Pacific (FTAAP).