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Regional Comprehensive Economic Partnership (RCEP) Definition

By 澳洲幸运5开奖号码历史查询:Shobhit Seth

Updated February 02, 2025

Reviewed by

Michael J Boyle

Fact checked by

Yarilet Perez

Group of professional black people — Jonathan Erasmus / Getty Images

Whꦜat Is the Regional Comprehensive Economic ﷽Partnership (RCEP)?

The Regional Comprehensive Economic Partnership (RCEP) is a free trade agreement (FTA) to create the world's largest 澳洲幸运5开奖号码历史查询:trading bloc. The agreement represents a major win for China, in its efforts to extend its trade partnerships and economic ties. The 15 Asia-Pacific nations, representing nearly a third of the world's gross domestic product, signed the agreement on Nov. 15, 2020, via teleconference. The agreement came into force in 2022.

Key Takeaways

The Regional Comprehensive Economic Partnership (RCEP) is a free trade agreement among fifteen countries in the Asia-Pacific region.
China is a key member of RCEP, giving it the upper hand in influencing the rules of trade in Asia-Pacific.
The agreement was signed in 2020 and came into force in 2022.

Understanding the Regional Comprehensive Economic Part🏅nership (RCEP)

Backed by China, RCEP was envisaged as a way to bolster trading ties among nations across Asia-Pacific and promote trade and economic growth in the region. Initially, it includes the 10 member countries of the 澳洲幸运5开奖号码历史查询:Association of Southe🍎ast Asian Nations (ASEAN🌃) and five Asi🦋a-Pacific countries with whom ASEAN has exis🃏ting FTAs:

Australia
China
Japan
New Zealand
South Korea

India had also planned to joinജ the deal but pulled out in November 2019.

While not as comprehensive as the Comprehensive an𒉰d Progressive Agr♚eement for Trans-Pacific Partnership (CPTPP), RCEP on a broad range of goods and services and establish rules on such things as investment, competition, and intellectual property, including digital copyright. Unlike the CPTPP,🍨 RCEP does not include provisions on labor ♛and environmental standards.

30%

The fifteen countries of the RCEP have a combined 30% of the world's population, and about 30% of world GDP.

The🔯 Regional Comprehensive🥀 Economic Partnership (RCEP) Offers a Win for China

Concerned that China was poised to write the trading rules for Asia in the 21st century, U.S. President Barack Obama led the creation of the rival Trans-Pacific Partnership (TPP), itself an enormous and even more comprehensive trade agreement than RCEP. TPP originally included 12 nations from Asia-Pacific and the Americas but not China. However, U.S. President Donald Trump withdrew from the TPP shortly after taking office in early 2017.

The remaining members of the TPP pushed ahead and renamed the agreement the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Trade ministers from all 11 remaining nations have signed it and seven have ratified it. But Trump's withdrawal significantly diminished its impact and U.S. influence, and the conclusion of RCEP negotiations give China an edge in setting the terms of trade in the Asia-Pacific.

The🐼 Regional Comprehensive Economic Partnership (RCEP)🎶 and CPTPP Members

While the two trade blocs were designed with competing interests in mind, seven countries in Asia-Pacific are parties to both of them:

Australia
Brunei
Japan
Malaysia
New Zealand
Singapore
Vietnam

How Big Is the Regional Comprehensive Economic Partnership (RCEP)?

The Regional Comprehensive Economic Partnership (RCEP) has fifteen member countries, representing about 30% of the world's population and 30% of world GDP. This makes it the world's largest free trade area in terms of both market size and economic activity.

What Are the Downsides of RCEP?

Critics of the Regional Comprehensive Economic Partnership say that the agreement does not go far enough in reducing tariffs and trade barriers among member states, especially given that many of them have already agreed to reduce these obstacles through other commitments. In addition, many member countries continue to implement non-tariff barriers to trade which may reduce the effectiveness of the free trade agreement.

Who Is Responsible for Paying for Tariffs?

Importers pay tariffs and other duties at the port of entry when they ship products into a country. In practice,🍒 the costs of a tariff are passed on to customers when they buy merchandise fr🎉om an importer or retailer.

The Bottom Line

The Regional Comprehensive Economic Partnership (RCEP) is an international agreement that creates the world's largest free trade area, centered around the major economies of China, Japan, South Korea, and Australia. The agreement reduces tariffs and other trade barriers, allowing member countries to profit from closer economic ties.

Article Sources

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Japan Ministry of Economy, Trade and Industry (METI). "."
Association of Southeast Asian Nations (ASEAN). "."
Australian Government, Department of Foreign Affairs and Trade. "."
New Zealand Ministry of Foreign Affairs and Trade. "."
Office of the United States Trade Representative (USTR). "."
Office of the United States Trade Representative. "."
East Asia Forum. "?"

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