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As the world grapples with the COVID-19 pandemic and multiple uncertainties, the implementation of the RCEP trade pact offers a timely boost to faster recovery and long-term growth and prosperity of the region.
HONG KONG, Jan. 2 (Xinhua) -- Commenting on his doubled income from the sale of five tons of durian to export traders in December, Nguyen Van Hai, a veteran farmer in Vietnam's southern Tien Giang province, attributed such growth to the adoption of stricter cultivation standards.
He also expressed satisfaction over higher import demand from countries participating in the Regional Comprehensive Economic Partnership (RCEP), of which China takes the lion's share.
Like Hai, many Vietnamese farmers and companies are expanding their orchards and improving the quality of their fruit in order to boost their exports to China and other RCEP members.
The RCEP agreement, which entered into force a year ago, groups 10 countries of the Association of Southeast Asian Nations (ASEAN) as well as China, Japan, South Korea, Australia and New Zealand. It aims to ultimately eliminate tariffs on over 90 percent of goods trading among its signatories over the next 20 years.
As the world grapples with the COVID-19 pandemic and multiple uncertainties, the implementation of the RCEP trade pact offers a timely boost to faster recovery and long-term growth and prosperity of the region.
TIMELY BOOST TO RECOVERY
To increase exports to RCEP countries, Vietnamese enterprises must innovate technology and improve designs and product quality, Dinh Gia Nghia, deputy head of a food export company in the northern Ninh Binh province, told Xinhua.
"The RCEP has become a launching pad for us to increase product output and quality, as well as the quantity and the value of exports," he said.
Nghia estimated that in 2023, Vietnam's fruit and vegetable exports to China may increase by 20 to 30 percent, thanks mainly to smoother transport, quicker customs clearance and more efficient and transparent regulations and procedures under the RCEP arrangement, as well as e-commerce development.
Customs clearance has been shortened to six hours for agricultural products and within 48 hours for general goods under the RCEP agreement, a major boon for Thailand's export-dependent economy.
In the first nine months of 2022, Thailand's trade with RCEP member countries, which accounts for around 60 percent of its total foreign trade, rose 10.1 percent year on year to 252.73 billion U.S. dollars, data from Thailand's Commerce Ministry showed.
For Japan, the RCEP has brought the country and its largest trading partner China into the same free trade framework for the first time.
"Introducing zero tariffs when there is a large volume of trade will have the most significant effect on trade promotion," said Masahiro Morinaga, chief delegate of the Japan External Trade Organization's Chengdu office.
Japan's official data showed that the country's exports of agricultural, forestry, and fishery products and food hit 1.12 trillion yen (8.34 billion dollars) for the 10 months through October last year. Among them, exports to the Chinese mainland accounted for 20.47 percent and increased by 24.5 percent from the same time a year earlier, ranking first in export volume.
In the first 11 months of 2022, China's imports and exports with RCEP members totaled 11.8 trillion yuan (1.69 trillion dollars), up 7.9 percent year on year.
"The RCEP has been a significant stand-out agreement in a time of great global trade uncertainty," said Professor Peter Drysdale from the East Asian Bureau of Economic Research at the Australian National University. "It pushes back against trade protectionism and fragmentation in 30 percent of the world economy and is a hugely stabilizing factor in the global trading system."
According to an Asian Development Bank study, the RCEP will increase the member economies' incomes by 0.6 percent by 2030, adding 245 billion dollars annually to regional income and 2.8 million jobs to regional employment.
REGIONAL INTEGRATION
Experts say the RCEP pact will accelerate regional economic integration through lower tariffs, stronger supply chains and production networks, and forge a more robust trade ecosystem in the region.
The RCEP's common rules of origin, which stipulate that product components from any member country would be treated equally, will increase sourcing options within the region, create more opportunities for small and medium-sized enterprises to integrate into the regional supply chains and reduce trading costs for businesses.
For emerging economies among the 15 signatories, foreign direct investment inflows are also expected to grow as major investors in the region are stepping up specialization to develop supply chains.
"I see the potential of the RCEP becoming an Asia-Pacific super supply chain," said Professor Lawrence Loh, director of the Center for Governance and Sustainability at the National University of Singapore's Business School, adding that if any parts of the supply chain become disrupted, other countries can come in to patch up.
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