On November 15, the Fourth Regional Comprehensive Economic Partnership Agreement Leaders’ Meeting was held. Ten ASEAN countries and 15 countries including China, Japan, South Korea, Australia, and New Zealand formally signed the Regional Comprehensive Economic Partnership Agreement (RCEP), marking The world’s largest free trade agreement was officially reached.
The signing of the RCEP is an important step for regional countries to take concrete actions to safeguard the multilateral trading system and build an open world economy. It is of symbolic significance for deepening regional economic integration and stabilizing the global economy. RCEP is regarded as the world’s largest free trade agreement because it covers 2.2 billion people, accounting for about 30% of the world’s total population. The 15 member states have a GDP of 25.6 trillion U.S. dollars in 2019, accounting for the global economy. 29.3% of the total, the intra-regional trade volume was 10.4 trillion US dollars, accounting for 27.4% of the global trade volume.
According to the official website of the Ministry of Finance, the RCEP Agreement has achieved fruitful results in the liberalization of trade in goods. Tariff reductions among members are based on the commitment to “immediately reduce tariffs to zero tariffs and reduce tariffs to zero tariffs within ten years.” The free trade zone is expected to achieve major phased construction results in a relatively short period of time.
It is worth mentioning that China and Japan reached a bilateral tariff concession arrangement for the first time, achieving a historic breakthrough. The agreement will help promote the realization of a high level of trade liberalization in the region. According to the “Nihon Keizai Shimbun” report, the tariffs between China and Japan will be greatly changed from the current 8%. The tariffs on 86% of industrial products exported from Japan to China may be cancelled, which will benefit Japan’s auto parts exports.
It is reported that some tariffs will be cancelled immediately, while the other parts will also be gradually cancelled. In the future, nearly 90% of auto parts exported from Japan to China (including key parts of traditional fuel vehicles and steel products, etc.) will achieve zero tariffs; 92% of Japanese exports to South Korea will be exempt from tariffs, much higher than the current 19 %, about 80% of auto products, including airbags and electronic components, will gradually eliminate tariffs on South Korea.