The Regional Comprehensive Economic Partnership (RCEP) agreement comes into force for Malaysia today, paving the way for the country to integrate into the world’s largest free trade agreement (FTA) that involves 15 countries, with a total population of more than 2.2 billion or nearly a third of the global population and world GDP.
RCEP represents a significant milestone in the vibrant growth and revitalisation of economies, anchored on the rules-based multilateral trading system, RCEP enables Malaysia to enjoy the global trade and investment ecosystem, benefiting from the eventual elimination of around 90 per cent of tariff among members.
“Other advantages to be gained include further liberalisation of trade encompassing removal of non-tariff barriers, increased trade facilitation, removal of barriers to the services sector as well as enhancement of business environment through regulations relating to intellectual property protection, government procurement practices and e-commerce, Ministry Of International Trade And Industry said in a statement
The establishment of RCEP positions the Asia-Pacific region as the new centre of gravity for global commerce, with total trade expected to increase nearly US$42 billion. Within ASEAN, Malaysia is expected to be the largest beneficiary of the Agreement in terms of gains in exports, with a projected US$200 million increase, said MITI
Complementing the development agenda of the World Trade Organisation (WTO), RCEP would enhance recognition of the role of SMEs, including micro enterprises in contributing to economic growth, employment, and innovation. Noteworthy too is the provision of the special and differential treatment accorded to least-developed members, which would be instrumental in advancing equitable economic development.
As the world gradually recovers from the economic repercussions of the pandemic, RCEP presents a vital tool to re-invigorate businesses and economic activities through a marked reduction in barriers to trade across the region. Beyond improving the ways of doing business, RCEP would spark the creation of new regional supply chains apart from strengthening existing networks, thereby boosting the growth of domestic businesses as they immerse into the global trading ecosystem
