RECP’s implementation and future prospects
CHINA has been staunch supporter of openness, modernization, regional trade, investment and connectivity and full implementation of the Regional Comprehensive Economic Partnership (RCEP) agreement vividly reflects the holistic spirit of Chinese community with shared future, Global Development Initiative, Global Security Initiative and Global Civilizational Initiative. According to World Bank Report (December 2022), the RECP comprises 15 countries, covers 2.3 billion population (30 percent of world population), $25.8 trillion assets (30 percent of global GDP), $12.7 trillion or 1/3 global trade of goods and services. It is indeed the world’s largest free trade area guarantees of multilateral openness covering 90 percent of the goods covered by trade will subject to zero tariffs.
It seems that RECP is important for all 15 member countries to work jointly for removing all emerging socio-economic and geopolitical uncertainties. These countries should also emphasize on the stabilization of regional as well as global economy and industrial supply chains so that end goals of immense socio-economic integration and greater regional connectivity would be achieved. Hopefully, the recently fully implemented RECP will further consolidate the immense socio-economic integration drive through lowering trade barriers, improving market access, streamlining custom related procedure and tariffs and encouraging trade, investment and industrial chain supplies.
Now the RECP officially has been entered into force in the Philippines, marking that the agreement takes effective for all 15 members, starting operationalization and channelization stage of the free trade area with the largest population, largest economic and trade volume in the world which is indeed a good omen for all the member countries, regional economies and last but not the least quick economic recovery of the world. In its recent statement, the Chinese Ministry of Commerce (MOFCOM) termed the RECP important to generate momentum to regional economic integration and contribute to long-term regional and global economic stability and development. The RECP will support an open, free, fair, inclusive and rules-based multilateral trading system in all the 15-member countries. On its part, China is fully committed to continuously promoting a comprehensive, mutually beneficial and high-level economic partnership.
It predicts that the RECP will further stimulate multilateral openness of trade of goods, services, investment and markets. It will accelerate the free flow of production factors comprising raw material, finished products, modern technologies, human capitals, investment opportunities, businesses information in the region and promote the gradual formation of a more prosperous market. It hopes that the RECP will promote wider integration, higher-level and deeper open cooperation among member countries. Critical analysis reveals that complete activation of the RECP will be beneficial for the Chinese openness policy leading toward greater regional integration, economic stability, sustainability and immense social development and nurturing of human capitals among the member countries.
Moreover, it will also be instrumental for further integration of regional industrial and supply chains and gearing up of constant implementation of structural reforms enabling higher level of institutional opening-up. Furthermore, obviously the implementation of the RCEP would further stabilize and diversify China’s foreign trade opportunities, trading partners, access to new potential markets and foreign investment and the trade in goods among the members. According to the MOFCOM figures the total import and export volume between China and other RCEP members reached 12.95 trillion RMB ($1.77 billion), a year-on-year increase of 7.5 percent, accounting for 30.8 percent of China’s total foreign trade.
Additionally, the MOFCOM shared that from January to April 2023, the total import and export volume between China and other RCEP members was 4.12 trillion RMB, a year-on-year increase of 7.3 per cent, accounting for 30.9 percent of China’s total foreign trade which is promising and prosperous. The Chinese official data shares that in 2022, China’s actual investment from other RCEP members was $23.53 billion, a year-on-year increase of 23.1 percent. From January to April 2023, China actually utilized nearly $8.9 billion in investment from other RCEP members, a year-on-year increase of more than 13.7 percent.
To conclude all member countries of the RECP should jointly work for further tariff reduction, service trade and investment opening commitments into practice. It should also work for promoting intra-regional trade and investment, stabilize industrial and supply chains and enhance people’s wellbeing. There is no qualitative and quantitative comparison between the RECP which stands for openness, inclusiveness, integration and development whereas Indo-Pacific Economic Framework for Prosperity (IPEF) the US led showcases spirits of discrimination and exclusiveness primarily based on the principle of political manipulation and encircling China.
The RECP was signed on November 15, 2020 comprising the 15-member countries representing the world’s largest free trade agreement covering about 30 percent of the world’s population and also accounting for 30 percent of global trade. Comparative study of the Chinese official data confirms that it has formed multilateral befitting propositions for all the member countries in which lowering trade costs/barriers and strengthening of supply chains. Moreover, it has brightened the chances of economic recovery in the Asia-Pacific region and generated new job opportunities, consolidated regional SMEs network, services and last but not least trading & investment. Hopefully, it would also cater the slipover socio-economic and geopolitical ramifications caused by weak global economy and demand, the ongoing Russia-Ukraine conflict and aggressive US interest rate hikes.
—The writer is Executive Director, Centre for South Asia & International Studies, Islamabad, regional expert China, BRI & CPEC & senior analyst, world affairs, Pakistan Observer.
Email: [email protected]
