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SINGAPORE – The world’s largest trade pact was signed on Sunday (November 15) by the leaders of 15 countries after eight years of talks, a move seen as a boost for the region as it battles its worst crisis in decades.
The Regional Comprehensive Economic Association (RCEP) will open trade in goods and services and includes protections in areas such as electronic commerce and intellectual property.
The participating countries represent 30 percent of the world economy and one third of the world population.
They are made up of the 10 members of ASEAN (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam) and key partners such as Australia, China, Japan, South Korea and New Zealand.
Speaking at the RCEP leaders’ summit prior to the signing, Singaporean Prime Minister Lee Hsien Loong said the agreement is “a major step forward for the world, at a time when multilateralism is losing ground and the global growth is slowing down. “
“It signals our collective commitment to keep supply chains open and connected, and to promote freer trade and closer interdependence, especially in the face of Covid-19 when countries are turning inward and under protectionist pressures,” he added.
PM Lee also noted that the diversity of RCEP participating countries shows how economies at different stages of development can come together and contribute to the development of each other, as well as the multilateral trading system.
“This diversity, and the strong ties that participating countries have with the United States, Europe and the rest of the world, also reflects the inclusiveness and openness of the agreement,” he added.
Prime Minister Lee also expressed his hope that India can join the RCEP in the future so that the agreement “fully reflects the emerging patterns of regional integration and cooperation in Asia.”
Last November, India announced that it would withdraw from the RCEP negotiations due to concerns about trade imbalances. Several ASEAN leaders have since said that the door will remain open for India to join the trade deal.
The RCEP builds on existing free trade agreements between the Asean countries and the five partner countries. It will enter into force once six ASEAN countries and three partners have ratified the agreement.
Key benefits of the deal include eliminating tariffs on at least 92 percent of goods traded between participating countries, with additional preferential market access for Singaporean exports, the Ministry of Trade and Industry (MTI) said. on Sunday.
The flow of goods will also be faster between countries, with simplified customs procedures and improved trade facilitation provisions.
More companies in the service sector will be able to provide their services in participating countries as a foreign provider, with the increase in foreign participation limits in at least 50 subsectors, including professional services, telecommunications and financial services.
It will also be easier for companies to navigate and integrate into regional value chains, as the RCEP establishes a common set of business rules, the MTI said.
Non-traditional areas that are not in some existing agreements, such as e-commerce, competition policy, and intellectual property, are also included in the RCEP.
On the one hand, consumers’ personal data will be protected when they buy or carry out online activities, while electronic signatures and transactions will be more accepted in participating countries.
The agreement also provides for greater protection and enforcement of intellectual property. For example, Singaporean companies will only need to file a single patent or trademark application that would apply in multiple countries, MTI said.
Participating countries also agreed under the RCEP to publish laws, regulations and procedures related to public procurement and bidding opportunities, a new area of cooperation that is not featured in any existing ASEAN agreement.
This will allow greater transparency for companies to seek government procurement opportunities in the region, the MTI said.
Asean Secretary General Lim Jock Hoi told The Straits Times that RCEP will ensure that markets stay open and provide much-needed certainty and stability by businesses as they face the Covid-19 crisis.
“One of the lessons learned from Covid-19 is the need to improve economic resilience and strengthen supply chain connectivity, which could be achieved, among other things, by keeping markets open and ensuring the free flow of goods and services. , especially for those that are considered essential. “, he said, adding that these are supported by the RCEP.
“The signing of the RCEP agreement at this time when the world is in the midst of an unprecedented challenge brought on by Covid-19 is a demonstration of the region’s strong commitment to open, inclusive and rules-based multilateralism and trust. contribution of trade to recovery efforts after a pandemic, “he added.
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