Expected to Go into Effect on Jan. 1 of 2022
Thailand, Singapore, Brunei, Laos, Cambodia and Vietnam as six ASEAN members submitted their ratification instrument regarding the Regional Comprehensive Economic Partnership (RCEP) to the secretariat of the ASEAN on Oct. 28.
The RCEP agreement becomes effective 60 days after ratification instrument submission by six out of the 10 member states of the ASEAN and three among South Korea, China, Japan, Australia and New Zealand. China and Japan already submitted their instruments and the world's biggest FTA with a trade volume of 6,600 trillion won is expected to go into effect on the first day of 2022 with the ratification procedures in New Zealand and Australia completed on Nov. 2.
The RCEP is the largest multilateral trade agreement in the world. The trade volume of the 16 countries in it is US$5.6 trillion, which is equivalent to 31.9 percent of the global total. Their combined GDP and population are US$26 trillion and 2.27 billion, 30.8 percent and 39.7 percent of the global total, respectively. In 2019, the 15 other than South Korea accounted for 49.6 percent of South Korea’s annual exports.
The RCEP agreement consists of 20 chapters covering trade in goods and services, trade remedies, investment, intellectual property rights, etc. When it comes to the goods trade, the maximum tariff elimination will be 94 percent between South Korea and the ASEAN, 83 percent between South Korea and Japan, and 91 percent between South Korea, China, Australia and New Zealand. The service trade chapter covers national and most-favored-nation treatments, opening of the ASEAN culture sector, and so on.
The RCEP is led by China and the United States is closely monitoring it. The United States is planning to counter the impact of the RCEP with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which is led by Japan, went into effect in December 2018, and consists of 11 member states.