Explainer | Explained: Regional Comprehensive Economic Partnership (RCEP)
- The regional trade pact has been cast as China’s response to the Trans-Pacific Trade Partnership but does not set environmental or labour standards
It is expected to be signed in 2019 after several delays in negotiations.
How important is it?
Taken together, the 16 countries negotiating the RCEP encompass about one-third of global GDP and almost half the world’s population.
The pact aims to cover the trade in goods and services, as well as investment, intellectual property and dispute resolution.
Concerns have also been raised about disparities between member countries, and the possibility that the pact could exacerbate global inequality.
The deal also lacks provisions for the liberalisation of state-owned companies.
Explained: the CPTPP trade deal
What is the difference between TPP and RCEP?
The two deals have been shaped by the countries that led negotiations: the US and China, respectively.
The TPP was a more ambitious plan, including market access for goods and services as well as regulations on labour, the environment, intellectual property and state-owned companies.
The RCEP, on the other hand, is more narrowly focused on standardising tariffs across the region, as well as improving market access for services and investment.
The latter also includes special provisions for developing economies, such as gradual tariff liberalisation and transition times.
According to forecasts from the Asian Development Bank in 2016, the TPP had the potential to provide up to US$400 billion in global income benefits before the US withdrawal, whereas the RCEP’s contribution would amount to an estimated US$260 billion.
Will RCEP be signed any time soon?
In the latter half of 2018, representatives of several participant countries were quoted as expressing their hope for a “substantial conclusion” to negotiations by the year’s end.
