The long-awaited Fourth Regional Comprehensive Economic Partnership agreement has finally taken a new turn.At a press briefing on The 11th of This month, our Ministry of Commerce officially announced that 15 countries have completed negotiations on all areas of the Fourth Regional Comprehensive Economic Partnership (RCEP).

All areas of disagreement have been resolved, the review of all legal texts has been completed, and the next step is to push the parties to formally sign the agreement on The 15th of this month.

The RCEP, which includes China, Japan, South Korea, the ten MEMBERS of the Association of Southeast Asian Nations, Australia and New Zealand, would create Asia’s largest free trade area and cover 30 per cent of global gross domestic product and trade.It will also be the first framework for free trade between China, Japan and South Korea.

The RCEP aims to create a free trade agreement for the single market by cutting tariff and non-tariff barriers.India pulled out of the talks in November because of disagreements over tariffs, trade deficits with other countries and non-tariff barriers, but the remaining 15 countries have said they will try to sign the agreement by 2020.

When the dust settles on the RCEP, it will give China’s foreign trade a shot in the arm.

The road to negotiations has been long and bumpy, with India abruptly withdrawing

Regional Comprehensive Economic Partnership agreements (Regional Comprehensive Economic Partnership, RCEP), was launched by the 10 asean countries and by China, Japan, South Korea, Australia, New Zealand, India, the six free trade agreement with asean countries to participate in together, a total of 16 countries, aims to cut tariffs and non-tariff barriers, establish a unified market free trade

agreement.In addition to tariff cuts, consultations were held on rule-making in a wide range of areas, including intellectual property rights, e-commerce (EC) and customs procedures.

From the perspective of the preparation process of the RCEP, THE RCEP was planned and promoted by ASEAN, while China played a crucial role in the whole process.

At the 21st ASEAN Summit held at the end of 2012, 16 countries signed the RCEP framework and announced the official start of negotiations.Over the next eight years, there were long and complex rounds of negotiations.

Chinese Premier Li Keqiang attends the third RCEP Leaders’ Meeting in Bangkok, Thailand, on Nov 4, 2019.At this meeting, the RCEP concluded the main negotiations, and the leaders of 15 countries except India issued a joint statement on the RCEP, calling for continued negotiations with the goal of signing the RCEP by 2020.This marks an important milestone for the RCEP.

However, it was also at this meeting that India, whose attitude had changed from time to time, pulled out at the last minute and decided not to sign the RCEP.At the time, Indian Prime Minister Narendra Modi cited disagreements over tariffs, trade deficits with other countries and non-tariff barriers as the reason for India’s decision not to sign the RCEP.

Nihon Keizai Shimbun once analyzed this and said:

In the negotiations, there is a strong sense of crisis because India has a large trade deficit with China and fears that a tariff cut would hit domestic industries.In the final stages of the negotiations, India also wants to protect its industries;With his country’s economy stagnating, Mr Modi has in effect had to turn his attention to domestic issues such as high unemployment and poverty, which are more of a concern than trade liberalisation.

Indian Prime Minister Narendra Modi attends the ASEAN Summit on Nov 4, 2019

In response to these concerns, Geng Shuang, then spokesman for the Chinese Foreign Ministry, stressed that China had no intention of pursuing a trade surplus with India and that the two sides could further broaden their thinking and expand the pie of cooperation.China is ready to work with all parties in the spirit of mutual understanding and accommodation to continue consultations to resolve the issues facing India in the negotiations, and welcomes India’s early accession to the Agreement.

Faced with India’s sudden retreat, some countries struggle to gauge its true intentions.For example, some ASEAN countries, fed up with India’s attitude, proposed an “exclusion of India” agreement as an option in the negotiations.The aim is to complete the negotiations first, invigorate trade within the region and reap “results” as soon as possible.

Japan, on the other hand, has repeatedly stressed the importance of India in RCEP negotiations, showing an attitude of “not without India”.At that time, some Japanese media said that Japan objected to the “exclusion of India” because it hoped that India could participate in the “free and open Indo-Pacific idea” put forward by Japan and the United States as an economic and diplomatic strategy, which had achieved the purpose of “containing” China.

Now, with the RCEP being signed by 15 countries, Japan has accepted the fact that India will not join.

It will boost regional GDP growth, and the importance of RCEP has become even more prominent in the face of the epidemic

For the entire Asia-Pacific region, the RCEP represents a huge business opportunity.Zhang Jianping, director of the Research Center for Regional Economic Cooperation under the Ministry of Commerce, pointed out that RCEP will cover the world’s two largest markets with the greatest growth potential, China’s market with 1.4 billion people and asean’s market with more than 600 million people.At the same time, these 15 economies, as important engines of economic growth in the Asia-Pacific region, are also important sources of global growth.

Zhang Jianping pointed out that once the agreement is implemented, the demand for mutual trade within the region will grow rapidly due to the relatively large removal of tariff and non-tariff barriers and investment barriers, which is the trade creation effect.At the same time, trade with non-regional partners will be partly transferred to intra-regional trade, which is the transfer effect of trade.On the investment side, the agreement will also bring about additional investment creation.Therefore, the RCEP will boost the GDP growth of the whole region, create more jobs and significantly improve the well-being of all countries.

The global epidemic is spreading at an accelerating pace, the world economy is in dire straits, and unilateralism and bullying are rife.As an important member of Regional cooperation in East Asia, China has taken the lead in both fighting the epidemic and recovering economic growth.Against this background, the conference should send out the following important signals:

First, we need to boost confidence and strengthen unity.Confidence is more important than gold.Only solidarity and cooperation can prevent and control the epidemic.

Second, deepen cooperation against coVID-19.While mountains and rivers separate us, we enjoy the same moonlight under the same sky.Since the outbreak of the epidemic, China and other countries in the region have worked together and supported each other.All parties should further deepen cooperation in public health.

Third, we will focus on economic development.Economic globalization, trade liberalization and regional cooperation are crucial to jointly combat the epidemic, promote economic recovery and stabilize the supply chain and industrial chain.China is ready to work with countries in the region to build networks of “fast track” and “green track” for personnel and goods exchanges to help restart work and production and lead economic recovery.

Fourth, we need to keep to the direction of regional cooperation and properly handle differences.All parties should firmly support multilateralism, uphold ASEAN centrality, adhere to consensus building, accommodate each other’s comfort level, refrain from introducing bilateral differences into multilateralism and other important principles, and work together to safeguard peace and stability in the South China Sea.

The RCEP is a comprehensive, modern, high-quality and mutually beneficial free trade agreement

There was a footnote in the previous Bangkok joint statement describing the 20 chapters of the agreement and the titles of each chapter.Based on these observations, we know that the RCEP will be a comprehensive, modern, high-quality and mutually beneficial free trade agreement.

It is a comprehensive free trade agreement.It has 20 chapters, including the basic features of the FTA, trade in goods, trade in services, access to investment and the corresponding rules.

It is a modern free trade agreement.It includes e-commerce, intellectual property rights, competition policy, government procurement, small and medium-sized enterprises and other modern content.
It is a high-quality free trade agreement.In terms of trade in goods, the level of openness will reach more than 90%, higher than that of WTO countries.On the investment side, negotiate access to investments using a negative list approach.

It is a mutually beneficial free trade agreement.This is mainly reflected in trade in goods, trade in services, investment rules and other areas have achieved a balance of interests.In particular, the Agreement also includes provisions on economic and technical cooperation, including transitional arrangements for the least developed countries such as Laos, Myanmar and Cambodia, including more favourable conditions for their better integration into regional economic integration.