The World’s Largest FTA
The Regional Comprehensive Economic Partnership (RCEP) became effective on Feb. 1 as the world’s largest FTA that accounts for 30 percent of the global trade volume, GDP and population. It consists of the 10 member states of the ASEAN, Australia, China, Japan, South Korea and New Zealand.
The existing FTAs between South Korea and the 10 member states remain effective regardless of the RCEP. South Korean exporters can choose between the RCEP and the existing agreements.
The implementation of the RCEP means the conclusion of the first FTA between South Korea and Japan. Although Japan’s export restrictions against South Korea related to certain semiconductor and display materials are still ongoing for almost 30 months, the RCEP is expected to reduce uncertainties related to their bilateral trade.
According to the Ministry of Trade, Industry and Energy, the RCEP means more opening of the auto parts, steel, game and entertainment markets in particular. “As for culture content, logistics and distribution, the level of market opening of the RCEP is higher than that of the FTA between South Korea and the ASEAN, which became effective in 2007,” it said, adding, “With the RCEP, the Philippines, Thailand and Indonesia further opened their online game, animation, music recording and film markets.”
When it comes to intellectual property rights, the RCEP comes with comprehensive protective measures and remedies covering copyrights and patent rights to trademarks and design rights. “This is expected to lead to more popularity of Korean culture in the ASEAN region,” the ministry said.
In the e-commerce chapter of the new agreement, free cross-border data transfer is stipulated along with prohibition of demand for computing facility localization. “Country risks can be better avoided and e-commerce in the region can be better promoted,” it explained, continuing, “The regional e-commerce market is expected to grow from US$38.2 billion to US$153 billion from 2019 to 2025.”