RCEP must be steadfast in countering challenges, expand trade — CIRD
BEIJING: The Regional Comprehensive Economic Partnership (RCEP) should be steadfast in upholding multilateralism and counter challenges such as trade protectionism, as well as measures like the reciprocal tariffs announced by the United States (US).
President of the China Institute for Reform and Development (CIRD) Chi Fulin said it is more crucial now than ever for regional economies to uphold multilateralism through the RCEP.
"RCEP is a very dynamic free trade area. As the world's largest free trade agreement (FTA), the RCEP accounts for one-third of the world's total economic output, trade value, population and foreign investment," he said in an article published in China Daily here recently.
According to Chi, member economies recorded an average annual gross domestic product (GDP) growth of 4.5 per cent, 1.7 percentage points higher than the global average from 2010 to 2023.
He added that as the key regional driver, the total trade-to-Gross Domestic Product (GDP) ratio of ASEAN nations increased from 84 per cent to 93 per cent from 2016 to 2023, Chi said.
"This demonstrates that maintaining a stable free trade order is decisive for the growth of ASEAN and RCEP economies," he noted.
RCEP is the FTA involving 10 ASEAN countries, namely Brunei Darussalam, the Philippines, Indonesia, Cambodia, Laos, Malaysia, Myanmar, Singapore, Thailand and Vietnam, with five other ASEAN partners that include Australia, China, Japan, South Korea and New Zealand, that was signed in November 2020.
RCEP entered into force for Malaysia on 18 March 2022.
Chi highlighted that the RCEP is expected to contribute an additional 4.47 percentage points to ASEAN's GDP growth by 2035.
Furthermore, he pointed out that advancing economic and trade cooperation with the Shanghai Cooperation Organisation will also be important.
"Therefore, the regional economies should jointly build the RCEP to a higher level," he said.
Moreover, Chi emphasised that China, Japan and Korea account for over 80 per cent of RCEP's total economic output and should enhance trilateral cooperation, particularly in the service sector, which could unlock US$1.4 trillion (US$1 = RM4.38 in new market opportunities.
He opined that expediting the transition from country-specific to unified tariff concessions and moving from 'partial cumulation' to 'full cumulation' of rules of origin will facilitate integrated regional supply chains.
Chi also called for greater coordination in strengthening RCEP's institutional framework, including establishing a permanent secretariat and a dedicated dispute settlement committee.
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