Regional economic blocs free#

RCEP covers relevant provisions in services too, including commitments by each member not to discriminate vis-Г -vis other membersвЂ™ investors in several service sectors.

This may help RCEP members attract a larger share of global value chains (GVCs) and deepen their specialization, which may be particularly important at a time when the U.S.-China trade dispute has accelerated the reconfiguration of GVCs in and out of China. As its perhaps most important feature, the agreement aligns rules of origin for all 15 countries, facilitating the integration of RCEP participants into the same production chain. For example, it encourages importing countries to accept the product standards of other member countries from where the good originates if those countries provide the same level of consumer protection. (Low import tariffs are the result of the global trend of unilateral tariff liberalization over the past decades and a web of existing trade agreements among RCEP members, such as the ASEAN-China FTA, ASEAN-Australia-New Zealand FTA, China-Australia FTA and Japan-Korea FTA.) It harmonizes the provisions imposed by countries on the trade in goods, providing more certainty for traders and investors. The agreement focuses on NTBs as import tariffs were already relatively low among RCEP members. RCEP deepens trade and investment relations between member countries mainly through reductions in non-tariff barriers (NTBs) on goods and services trade. Good news for member countries, particularly non-ASEAN

Regional economic blocs free#

This has also propelled the RCEP to overtake trading blocs, which were much larger at the beginning of the century, including the North America Free Trade Agreement (NAFTA) and the European Union (Figure 2). The remarkable growth of China and Southeast Asian economies is reflected in the rising share of the RCEP bloc in global GDP, trade, and FDI over the past two decades (Figure 1). Driven by China, the RCEP trade bloc has gained prominence in global trade and investment, and has outstripped the growth of large high-income trade blocs over the past decades.