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World’s biggest trade deal RCEP is a year old – here’s why it still has room to grow
- Covering a third of the world’s population and nearly as much of its GDP, the Regional Comprehensive Economic Partnership has done some good, but shortcomings persist
- ‘Big bang effects’ of integrating supply chains and erasing restrictive trade practices among RCEP’s 15 signatory countries are expected to take time to materialise
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The world’s largest free-trade deal just turned a year old. And like a toddler, while its full potential remains yet to be seen, there are glimmers of “hope” that it will develop into everything that was envisioned years ago when its member countries hailed it as a groundbreaking step toward lowering trade barriers in Asia.
But for now, the Regional Comprehensive Economic Partnership (RCEP) is still finding its footing. And analysts say that the pact – once regarded as a China-backed alternative to the eventually scrapped US-led Trans-Pacific Partnership – needs more time to grow into a trade behemoth benefiting its 15 signatory countries in the Asia-Pacific region.
When it took effect last January, the 20-year agreement was seen as a standard-setting means to internationalise the yuan in regional trade while integrating supply chains and erasing restrictive trade practices and tariffs on a range of goods.
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And the RCEP could very well continue to grow and live up to those high expectations, including through new guidelines that can maximise its potential – that is the hope of businesses such as Hong Kong-based Opal Cosmetics.
Although Hong Kong is not currently an RCEP member, it has applied to join the pact. But Opal is already qualified to take advantage of the benefits because it exports Chinese-manufactured products to the likes of Thailand, the Philippines, Australia and New Zealand.
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