From China Daily news, RCEP (Regional Comprehensive Economic Partnership Agreement), which will officially enter into force for Brunei, Cambodia, Laos, Singapore, Thailand, Vietnam, China, Japan, New Zealand and Australia on January 1, 2022. South Korea will also join the effective implementation on February 1, and officially set sail for the world’s largest free trade zone.

For RCEP member states, a series of substantive benefits such as tariff reduction, trade facilitation, and factor circulation will build a new platform and provide new impetus for regional cooperation. The specific advantages are as follows:

1. Lower tariffs promote economic and trade exchanges within the region. After the agreement comes into effect, more than 90% of the goods trade between approved member states will eventually achieve zero tariffs, and all countries will fulfill their commitments to liberalize physical trade in a relatively short period of time. On the day RCEP takes effect, the immediate zero-tariff ratio between China and ASEAN, Australia, and New Zealand will exceed 65%, and the immediate zero-tariff ratio with South Korea will reach 39% and 50%, respectively. According to the estimation of the Japanese government, RCEP is expected to finally make 91.5% of Japan’s industrial products tax-free, increase the gross domestic product (GDP) by 2.7%, and bring economic benefits beyond other trade agreements that Japan has signed so far. The Ministry of Commerce of Cambodia, the rotating ASEAN chairmanship in 2022, predicts that Cambodian agricultural products and industrial products will enjoy preferential tariff treatment. RCEP can promote Cambodia’s GDP growth by about two percentage points, with exports and investment increasing by 7.3% and 23.4% respectively.

2. Strengthen regional supply chain and industrial chain cooperation. In the context of distortions in global supply and demand and poor supply chains, RCEP’s rules of origin accumulation have greatly lowered the threshold for commodity enjoyment, and made the circulation of regional production resources more efficient and smooth. “RCEP has the potential to establish a super supply chain in Asia Pacific.

3. Promote more balanced development of the region. After the RCEP takes effect, developing economies and least developed economies in the region will receive greater economic and technical assistance to gradually bridge the development level differences among members.