RCEP and East Asian Regional Economic Cooperation

On January 1， 2022， the Regional Comprehensive Economic Partnership （RCEP） formerly entered into force. As the largest global free trade area accounting for about 30 percent of world total in population size， economic scale and trade volume， the RCEP has important bearings on the international economic and trade pattern. Not only did it integrate “fragmented” economic and trade arrangements in the East Asian region， it has also improved comprehensive development environment of the region and facilitated in-depth development of East Asian regional economic integration. With the huge combined impacts on supply chains and international trade and investment from profound changes that the world undergoes unseen for a century， uncertainty of the COVID-19 pandemic situation， uneven global economic development， and downward trend of world economy， it becomes necessary for East Asian regional economic cooperation to make corresponding readjustments. As a major East Asian country， China will， within the RCEP framework， enhance supply of international public goods and functional cooperation， play a more active role in East Asian regional economic cooperation， and inject still more vigor and vitality to sustainable development of East Asian economy and to global economic and trade cooperation at large.

RCEP Promotes In-depth Development of East Asian Economic Integration

The RCEP is an important juncture in the development process of East Asian regional economic cooperation. On the institutional plane， the RCEP has integrated several bilateral or regional trade arrangements， which lays an important foundation for regional peace， opening up and cooperation by achieving geographical coverage and integration for the first time between East Asian cooperation on the institutional plane and East Asian production network on the market integration plane.

I. RCEP Further Improves Regional Comprehensive Development Environment

Historically， it was an important background and cause of the “East Asian Miracle” that East Asian economies adopted an open market policy and development strategy. Ultimately， East Asian regional economic cooperation is regional open institutional regulations and legal protection mechanisms constructed under government auspices， or in another word regional comprehensive development environment. Since the advent of the 21st century， forms of international trade have continued to evolve， from cross-industry trade in the past towards intro-industry trade and intro-product trade， with ever increasing importance of value-chain trade. International trade has become more and more constrained by behind-the-border trade barriers like domestic regulation and policy uncertainty. The RCEP renders high-level regulation to behind-the-border issues like intellectual property， e-commerce， and competition policy. To be concrete， the Intellectual Property Chapter includes 14 sections and 83 articles， being the richest in content and the longest chapter of the RCEP agreement. As the most comprehensive IPR related trade agreement participated by the developing economies of East Asia， it has improved the level of overall IPR protection in the East Asian region， providing institutional guarantee for innovative activities and sustainable development of the region. The RCEP also renders high-level regulation to such important topics as localization of computing facility and electronically cross-border data transfer， creating a convenient and orderly institutional environment for developing digital trade in the East Asia region.

Meanwhile， the RCEP has also put forward a large number of trade and investment facilitation measures. For instance， Chapter 4 requires simplification of customs procedures， pre-arrival processing， and advance rulings. It also requires additional trade facilitation measures related to import， export， or transit formalities and procedures for authorized operators. Chapter 6 encourages enhanced cooperation and reduction of technical trade barriers. Chapter 10 encourages simplification of procedures for investment applications and approvals and extension of the scope of temporary entry permit and time-limit of natural persons. All these measures have improved the regional comprehensive development environment， for the benefit of attracting foreign direct investment （FDI） and developing value chains. Between January and June 2022， global FDI stood at US$872 billion， -7 percent against the same period of 2021. At the same period of time， the East Asian region absorbed an FDI of US$185 billion， registering a 5 percent growth over the same period of 2021. Especially， China， Malaysia and Vietnam saw an increase of 18 percent， 37 percent and 15 percent of FDI respectively in the second quarter of 2022 against the same period of 2021.

II. RCEP Provides Drivers for Regional Trade Recovery and Development

The RCEP provides that within a transition period of 20 years 90 percent of tariffs on goods will be gradually eliminated， the most important among which is immediate elimination of tariffs and elimination of tariffs in ten years. Especially， the RCEP set up China-Japan and China-South Korea free trade areas for the first time. Member states of the RCEP were committed to producing a negative list for trade in services in 6 years after the RCEP agreement entered into force （Myanmar， Laos and Cambodia to do so in 15 years）. They also made improvement on the basis of their commitments to the World Trade Organization （WTO）， reaching a commitment beyond the existing level of opening of the existing “ASEAN+1” free trade agreements. On investment， all member states of the RCEP were committed to adopting the method of negative list for a higher level opening in five industries including manufacturing， agriculture， afforestation， fishery and mining.

At present， the RCEP has already played a positive role in promoting regional trade development. For instance， on the micro plane， according to the figures of China customs， Chinese enterprises applied for RCEP certificates of origin and were issued 266，000 certificate-of-origin statements between January and June 2022 for an export value of 97.9 billion RMB， for which they were given 710 million RMB in tariff rebates by importing countries. During the same period of time， an import value of 23.86 billion RMB came under RCEP preferential tariff treatment with a total tariff rebate of 520 million RMB. On the macro plane， the RCEP made breakthroughs in putting in place China-Japan and China-South Korea free trade ties， further increasing China-Japan and China-South Korea bilateral trade. Between January and October 2022， China-Japan trade volume totaled 36.2 trillion yen， an increase of 16.2 percent year on year whereas Japan-South Korea trade volume totaled 9.5 trillion yen， an increase of 26.8 percent year on year.