The "Regional Comprehensive Economic Partnership Agreement" (RCEP) came into effect a few days ago, marking the free trade zone with the largest population, the largest economic and trade scale, the most diverse membership structure and the most potential for development in the world.
After the agreement takes effect, trade and investment liberalization and facilitation measures and unified economic and trade rules will greatly reduce operating costs, reduce operating uncertain risks, and provide institutional guarantees for stabilizing the regional industrial chain and supply chain, accelerating the flow of goods, technology, and The flow of services and capital have formed the effect of "trade creation".
In the context of the new crown pneumonia pandemic exacerbating the world economic recession, "reverse globalization", and global supply chain shocks, RCEP took effect as scheduled after 8 years of negotiations. It is not only a landmark achievement of East Asian regional cooperation, but also multilateralism. The victory of China and free trade will surely add new momentum to the promotion of regional development and prosperity, and contribute new forces to the recovery of the world economy.
Boost confidence and promote global economic recovery after the epidemic
At present, the global development environment is facing profound and complex changes. The severe impact of the new crown pneumonia epidemic has further increased instability and uncertainty, causing the global economy to fall into a deep recession, and international trade and investment have shrunk sharply, and consumption has been suppressed.
Under the current international situation, the effective RCEP will help alleviate many risks and uncertainties in regional economic recovery, boost market confidence, and inject new impetus into regional and global economic recovery and long-term prosperity after the epidemic.
The liberalization and facilitation measures and unified economic and trade rules of the agreement will not only help to form new trade and investment increments, but will also further stimulate the potential of the regional market, create more new consumer demand, and become the locomotive of global economic growth. Economic growth and welfare improvement in various countries.
On the whole, RCEP will significantly stimulate the overall growth of trade and investment in the region, and will also play a positive role in promoting global trade and welfare growth.
After the RCEP takes effect, more than 90% of the goods trade in the region will eventually achieve zero tariffs, which will complement the existing bilateral free trade agreements in the region, further improve the overall level of regional liberalization, greatly reduce the cost of intraregional trade, and produce obvious Trade promotion effect.
The "RCEP Impact Assessment Report on Regional Economy" issued by the Institute of International Trade and Economic Cooperation of the Ministry of Commerce predicts that by 2035, RCEP will drive the actual GDP, export and import increments of the region as a whole to increase by 0.86% and 18.30% respectively compared with the baseline scenario. And 9.63%, regional economic welfare will increase by 250.3 billion US dollars, the world's real GDP and import and export trade will also increase by 0.12% and 2.91% due to the implementation of RCEP, and economic welfare will increase by 169.6 billion US dollars.
After the RCEP takes effect, a higher level of trade and investment opening and a more secure institutional cooperation environment will accelerate the flow of economic factors and benefit the member states.
The agreement will not only promote regional investment growth and increase the return on capital of ASEAN countries, but also provide more employment opportunities for regional countries and promote the optimal allocation of human resource elements.
Whether from the perspective of real GDP growth rate or economic welfare, the impact of RCEP is positive.
Among them, the cumulative growth rate of ASEAN's real GDP was the highest, reaching 4.47%. The economic welfare of China, ASEAN, and Japan improved the most, with cumulative increases of 99.6 billion U.S. dollars, 54.9 billion U.S. dollars, and 51.2 billion U.S. dollars, respectively.
Cracking the "reverse globalization" and leading a new wave of globalization
Globalization is currently facing a countercurrent, and protectionism and unilateralism are gaining momentum.
Under the superposition of the changes in the past century and the new crown pneumonia epidemic, the world has more fog and chaos, "retreat", "sweeping" and "decoupling" are flooding, hegemony, bullying, hegemony, cold war thinking, zero-sum mentality, Power politics has repeatedly hit the bottom line of international order and morality.
RCEP came into effect as scheduled, which fully reflects the confidence and determination of all parties to jointly safeguard multilateralism and free trade and promote regional economic integration, allowing people to see light and hope in the gloom, and will lead a new round of development through the promotion of inter-regional free trade. The wave of globalization.
RCEP is a large-scale regional trade agreement jointly promoted by 15 free trade partners including ASEAN, China and Japan. It is a free trade zone with the largest population and the largest scale of economic and trade coverage in the world.
In 2020, the total population of RCEP member countries will reach 2.27 billion, GDP will reach 26 trillion U.S. dollars, and the total import and export volume will exceed 10 trillion U.S. dollars, accounting for about 30% of the global total, which is higher than the existing regional trade groups.
RCEP reduces or even removes the market access barriers between regional member states, and makes the economic ties between countries in the region more seamless, and will gradually form an open and prosperous regional integrated market covering 15 countries, which will increase regional trade and investment. , Make an important contribution to economic recovery and prosperity.
In particular, China and Japan, as the world's second and third largest economies, and Japan and South Korea have not established free trade relations. After the RCEP takes effect, it will promote the formation of a large market in China, Japan and South Korea, bringing considerable open dividends, which will become A new source of power to promote the growth of trade and investment in the three countries and regions.
More importantly, the membership structure of RCEP is the most diverse, and countries have different political and social systems and different levels of economic development.
Internationally, economic cooperation organizations represented by the OECD (OECD) are mostly composed of developed economies. Free trade between developed countries and emerging market countries is still facing greater challenges. RCEP has made useful explorations in this regard. .
RCEP members cover developed countries such as Japan and Singapore, as well as emerging market countries such as China and Thailand. The economic and industrial structures of each other are highly diverse and complementary. The liberalization and facilitation measures of the RCEP agreement and unified economic and trade The rules will not only help to form a new increase in trade and investment, but also will further stimulate the potential of the regional market, create more new consumer demand, and drive faster economic growth in all countries.
Stabilize expectations and ensure the security of the global supply chain
The spread of the epidemic has had a comprehensive impact on global production and demand, causing the supply chains of many industries to face a crisis of rupture or stagnation, highlighting the fragility of the global supply chain system under the international division of labor.
Therefore, more and more countries have begun to pay attention to the layout of the industrial chain supply chain from the perspective of security, and promote the change of the global industrial chain to a more stable and resilient direction.
As a modern, comprehensive, high-quality, and mutually beneficial free trade agreement, RCEP provides institutional guarantees for stabilizing the regional industrial chain and supply chain, helping to alleviate many risks and uncertainties faced by enterprises in foreign investment cooperation, stabilize expectations, and hope to advance In-depth integration of the industrial chain and supply chain among members.
RCEP adopts the rules of accumulation of origin in the field of goods trade, which will make the trade relations of RCEP members closer, and promote the formation of a closer and more resilient regional industrial chain supply chain.
The rules of accumulation of origin extend the scope of accumulation of raw materials to all member states in the region, greatly reducing the threshold for enjoying tariff preferences.
This will not only help promote member states' enterprises to carry out procurement, production and sales activities within the region, and make the trade relations between RCEP members closer, but also help deepen regional industrial chain supply chain cooperation.
Relying on the free trade platform established by RCEP, enterprises in member countries can flexibly purchase raw materials and intermediate products in the region in accordance with the principle of optimal allocation of resources, coordinate production and division of labor, and export finished products to the large market within the region without tax, thereby promoting Build a tighter, more stable and more resilient regional industrial chain supply chain.
In addition, in addition to trade in goods, RCEP member states have also made high-level openness commitments in service trade and investment, and established high-level rules on intellectual property rights and e-commerce. The flow of various economic factors will be smoother, and the industrial chain, The supply chain and value chain will be further consolidated and developed, which will promote the realization of higher-quality and deeper regional economic integration in East Asia.
(Author: Zhu Xiaoneng and Li Pan, respectively, professor and deputy dean of the School of Finance of Shanghai University of Finance and Economics, and assistant researcher of Shanghai Institute of International Finance and Economics)