The RCEP has been formally signed and the world's largest FREE trade Area has been established. What does that mean?

Eight years of long-distance running has covered the world's largest population, the largest economic and trade scale, and the most potential for development... The 15-member Regional Comprehensive Economic Partnership (RCEP) was signed during the fourth RCEP summit on Monday, marking the birth of the world's largest free trade area.

What is the significance of the signing of this agreement? What's so bright and interesting? What does it mean for China to build a new "double cycle" development pattern? Wang Shouwen, Vice Minister of Commerce and deputy representative of international trade negotiation, made the remarks on January 15.

Promoting regional economic integration boosts global economic confidence

Launched by ASEAN in 2012, the RCEP has gone through eight years of negotiations. Since this year in particular, members of the RCEP have overcome the difficulties brought about by coVID-19, fully completed market access negotiations, and reviewed more than 14,000 pages of legal texts of the AGREEMENT. Finally, the AGREEMENT was signed as scheduled during today's leaders' meeting.

"This marks the official launch of the world's most populous free trade zone with the largest economic and trade scale and the greatest development potential." Wang Shou said.

It is reported that the total population, economic size and trade volume of the 15 MEMBER states of the RCEP account for about 30% of the global total, which means that about one third of the global economic volume has formed an integrated market.

"The signing of the RCEP is a new milestone in regional economic integration in East Asia." Wang said this will boost confidence in regional trade and investment, strengthen industrial and supply chains, enhance cooperation capability, boost economic recovery of all countries and promote long-term prosperity and development of the region. At the same time, the RCEP will also provide a path and a strong impetus to the FTAAP process.

Moreover, the RCEP's concrete actions to support trade and investment liberalization and facilitation will boost global economic confidence. Wang said that the signing of the RCEP shows that all members are committed to reducing tariffs, opening up markets and reducing standard barriers. It sends a strong signal against unilateralism and protectionism and strongly supports free trade and the multilateral trading system. It helps to form positive expectations for the global economy and boost the recovery of the global economy after the epidemic.

Comprehensive, modern, high-quality and mutually beneficial free trade agreement

Wang said the RCEP is not only the world's largest free trade agreement, but also a comprehensive, modern, high-quality and mutually beneficial free trade agreement.

-- The RCEP is a comprehensive agreement. It covers 20 chapters, covering market access such as trade in goods, trade in services and investment, as well as a large number of rules on trade facilitation, intellectual property rights, e-commerce, competition policy and government procurement. It can be said that the agreement covers all aspects of trade and investment liberalization and facilitation.

-- THE RCEP is an agreement on modernization. It adopts the regional origin accumulation rules to support the development of regional industrial chain and supply chain. Adopt new technologies to facilitate customs and promote the development of new cross-border logistics; Adopting a negative list to make investment access commitments and greatly enhancing the transparency of investment policies; The agreement also includes a high-level section on intellectual property rights and e-commerce to meet the needs of the digital economy.

-- THE RCEP is a high-quality agreement. The total number of zero-tariff products in goods trade exceeds 90%. Trade in services and investment are significantly more open than the original 10+1 free Trade Agreement. At the same time, the RCEP has added two pairs of important countries, Namely, China, Japan and the ROK, which have significantly increased the level of free trade within the region. According to the calculations of international think tanks, the RCEP is expected to increase the export growth of member countries by 10.4% over the baseline in 2025.

-- The RCEP is a reciprocal agreement. There are developed countries, developing countries and even some least developed countries among the RCEP members. There are huge differences in economic system, development level and size among the members. The RCEP agreement has accommodated the demands of all parties to the greatest extent and achieved a balance of interests in market access and rules on goods, services and investment. The AGREEMENT also gives differential treatment to the least developed countries and sets up two special chapters on smes and economic and technological cooperation to help developing members strengthen capacity building, promote inclusive and balanced development in the region and share the fruits of RCEP.

We will help Accelerate the formation of a new pattern of "double cycle" of development in China

To build a network of high-standard free trade areas that is globally oriented -- the 14th five-year Plan contains clear provisions on "opening up to the outside world at a high level and opening up new prospects for win-win cooperation".

Accelerating the implementation of the free trade area strategy is an important part of China's new round of opening up. After the signing of the RCEP, China will sign 19 free trade agreements and 26 free trade partners, which will undoubtedly greatly enhance the "gold content" of China's FTA network.

Wang said that with the new China-Japan free trade relationship established through RCEP, China's trade coverage with its free trade partners will increase from the current 27 percent to 35 percent.

All RCEP members are important economic and trade partners of China. Data from the Ministry of Commerce shows that from January to September 2020, China's total trade with other RCEP members reached us $1,055 billion, accounting for about one third of China's total foreign trade.

"The RCEP agreement will help expand China's export market space, meet domestic import and consumption needs, strengthen regional industrial and supply chains, help stabilize foreign trade and foreign investment, and provide effective support for the formation of a new development pattern dominated by the major domestic cycles and mutually reinforcing domestic and international cycles." Wang Shou said.

According to RCEP regulations, the agreement must be ratified by at least nine of the 15 members, including at least six ASEAN members and at least three of China, Japan, The Republic of Korea, Australia and New Zealand.

Wang said that now the agreement has been signed, all RCEP members will go through their own domestic legal examination and approval procedures to push for the early entry into force and implementation of the agreement. Countries have accelerated their domestic ratification procedures, and China will work with all parties to ensure that the RCEP agreement will benefit businesses and people in the region at an early date.