Ladjevac: The Agreement on the Largest Free Trade Zone in the World has entered into force

On the first day of 2022, the Regional Comprehensive Economic Partnership (RCEP), signed on November 15, 2020, entered into force, creating the largest free trade zone in the world. stated in the author’s text for the Chinese Media Group (CMG) the Deputy Director of the Institute of International Politics and Economy Ivona Ladjevac.

“Regional comprehensive economic partnership contributes to increasing the economic integration of the region,” Ladjevac pointed out.

China, South Korea, Japan, Vietnam, the Philippines, Cambodia, Brunei, Myanmar, Laos, Thailand, Malaysia, Singapore, Indonesia, Australia and New Zealand have signed a regional comprehensive economic partnership agreement to create the world’s largest free trade zone.

As it is an area inhabited by almost a third of the world’s population and produces a third of the world’s gross domestic product (GDP), one can only speculate on the extent to which the RCEP, after the first year of implementation, will transform members’ cross-border business and increase economic integration.

The political connotations of this agreement are no less important. First, the Regional Comprehensive Economic Partnership Agreement is the first free trade agreement to bring together China, Japan and South Korea.

China has not had bilateral agreements of this kind with Japan and South Korea, although they are its third and fifth trade partners, respectively, but only narrowly specified trade agreements. This step creates the conditions for their relations to improve.

Given the fact that, in the world, all three countries represent technological and productive forces, one can only assume what momentum their cooperation will give to the global economy.

The RCEP has under its auspices both ASEAN member states (Association of Southeast Asian Nations) and non-Southeast Asian countries, so under new circumstances, conditions have been created that will enable those countries that have not followed the economic development of Southeast Asian countries to make significant progress.

That process will not be fast, but the conditions for its realization now exist. Despite some estimates that the provisions of the RCEP, although numerous (consolidated text of the Agreement in pdf format without accompanying annexes has 510 pages), are not overly strict, set rules on mutual trade, intellectual property and patents, internet sales and competition, will lead to the abolition of about 90 percent of the customs currently in force in the region.

There is no reason to doubt that the agreement will soon turn the whole of Asia into a coherent trade zone. Given the fact that agriculture and the services sector are only covered in terms, it could be expected that in the foreseeable future these areas will be regulated in more detail.

By Editor

One thought on “Ladjevac: The Agreement on the Largest Free Trade Zone in the World has entered into force”

Leave a Reply