The Regional Comprehensive Economic Partnership Agreement: A New Paradigm in Asian Regional Cooperation?

By Asian Development Bank

The Regional Comprehensive Economic Partnership (RCEP) is a milestone achievement in the regional economic integration led by the Association of Southeast Asian Nations (ASEAN) over the last 3 decades. It was formed to mitigate the challenges of dealing with multiple free trade agreements. This report analyses and compares the legal text of RCEP, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and relevant agreements of the World Trade Organization. It offers a mix of policy recommendations and suggests road maps to orient RCEP toward successful implementation.

• Language: English
• Publisher: Asian Development Bank
• Release date: Apr 1, 2022
• ISBN: 9789292694937

Book preview

THE REGIONAL COMPREHENSIVE ECONOMIC PARTNERSHIP AGREEMENT

A NEW PARADIGM IN ASIAN REGIONAL COOPERATION?

MAY 2022

Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO)

© 2022 Asian Development Bank

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Some rights reserved. Published in 2022.

ISBN 978-92-9269-492-0 (print); 978-92-9269-493-7 (electronic); 978-92-9269-494-4 (ebook)

Publication Stock No. TCS220172-2

DOI: http://dx.doi.org/10.22617/TCS220172-2

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Notes:

In this publication, $ refers to United States dollars.

ADB recognizes China as the People’s Republic of China, Korea as the Republic of Korea, and Vietnam as Viet Nam.

Cover design by Jasper Lauzon. On the cover: major port systems, vegetable market, and consultation photos by Ariel Javellana; airport and shopping mall photos by Lester Ledesma; public market and face mask vendor photos by Chor Sokunthea; ship photo by Abir Abdullah; fish port photo by Raymond Panaligan; and field worker photo by Ian Taylor.

Contents

Tables, Figures, and Boxes

Foreword

With Asia intent on staying on the path of economic recovery in 2022, the Regional Comprehensive Economic Partnership (RCEP) can be a timely tool to foster regional integration and economic growth. RCEP, partnering Southeast Asian nations with Australia, the People’s Republic of China, Japan, New Zealand, and the Republic of Korea, has the potential to strengthen manufacturing supply chains, raise productivity, and increase wages and employment.

RCEP was conceptualized in November 2012 to attain a comprehensive and mutually beneficial economic partnership agreement. After 8 years of negotiations, RCEP was signed on 15 November 2020. This laid a historic milestone on the road toward deeper economic integration. RCEP entered into force on 1 January 2022. It is nevertheless not the time to relax efforts. RCEP does not supersede existing free trade agreements and expected gains will not be automatic. RCEP will be closely watched to see whether it delivers on greater liberalization and economic cooperation.

To support member economies’ efforts to overcome implementation challenges, this report analyses and compares the legal text of RCEP, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and with relevant agreements of the World Trade Organization. The report covers all RCEP chapters—including trade in goods; ROO; sanitary and phytosanitary measures; technical barriers to trade; trade in services; investment; movement of people; and cross-cutting issues of intellectual property, small enterprises, and e-commerce, among others. Its analysis helps provide a better understanding of RCEP’s potential for benefits and value added over existing agreements around traditional issues of trade and investment liberalization and newer issues of regulatory coherence in building a better environment for business. It is hoped that the report can serve as a valuable resource to support policy makers and negotiators in RCEP implementation by identifying areas where further work is needed to make the agreement more attractive to final users, namely firms and investors.

The report shows RCEP presents valuable opportunities to deepen regional economic integration. Critically important are the agreement’s built-in provisions and economic and technical cooperation measures that make it possible to expand RCEP’s depth and coverage in the future. To realize this potential, policy makers and economic actors will need to forge appropriate responses to navigate the development and implementation challenges of the agenda. The report offers policy recommendations that can generate bold ideas for effective strategies to unlock new opportunities and orient RCEP toward successful implementation.

The Asian Development Bank continues to work closely with RCEP stakeholders to ensure effective implementation and evolution of the agreement toward strengthening regional integration and supporting inclusive and sustainable growth.

Albert Park

Chief Economist and Director General

Economic Research and Regional Cooperation Department

Asian Development Bank

Acknowledgments

This publication was prepared by the Regional Cooperation and Integration Division (ERCI) of the Economic Research and Regional Cooperation Department (ERCD), Asian Development Bank (ADB). It was financed by ADB under the Knowledge and Support Technical Assistance (TA) 6740: Raising the Value of Regional Trade Agreements—Key Factors for Successful Implementation and Positive Economic Impact, with funding support from ADB’s Technical Assistance Special Fund (TASF-7 and TASF-Others) and the Regional Cooperation and Integration Fund.

Cyn-Young Park, ERCI Director provided overall direction and supervision of the report at ADB.

Francesco Abbate (ADB consultant) and Pramila A. Crivelli, Economist in ERCI, are the lead authors of this report covering all the Regional Comprehensive Economic Partnership (RCEP) chapters and schedule of tariff commitments. Sanchita Basu Das, Economist in ERCI, drafted elements of the section on origin and rationale of the RCEP agreement and contributed to the sections on regulatory issues. Stefano Inama (United Nations Conference on Trade and Development [UNCTAD]) provided inputs as well as guidance on the review, interpretation, and comparison of the legal text of the trade agreements. Mark Pearson (ADB consultant), Pramila A. Crivelli, and Stefano Inama worked on the codification and analysis of product-specific rules of origin. Thi Hang Banh (ADB consultant) provided valuable assistance in compiling and analyzing RCEP tariff commitments.

The publication also benefited from the valuable insights from the ERCD Office of the Chief Economist and Director General and ADB regional departments during the review process. We are most grateful for their feedback and advice.

The publication was produced with the support of many members within ADB. Pramila A. Crivelli, Sanchita Basu Das, and Paulo Rodelio Halili, Senior Economics Officer in ERCI, conducted the groundwork, and coordinated overall production. James Unwin edited the manuscript. Jasper Lauzon created the cover design. Mike Cortes did the layout and typesetting. Cherry Lynn Zafaralla performed proofreading, while Marjorie Celis did the page proof checking, with support from Paulo Rodelio Halili, Carol Ongchangco (Operations Coordinator), and Gerald Pascua. Support for printing and publishing this report was provided by the Printing Services Unit of ADB’s Corporate Services Department and by the publishing team of the Department of Communications.

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