RCEP a catalyst for regional integration

With lower tariffs, growing markets, member countries see long-lasting mutual benefits

HONG KONG — Commenting on his doubled income from the sale of five metric tons of durian to export traders in December, Nguyen Van Hai, a veteran farmer in Vietnam's southern Tien Giang province, attributed such growth to the adoption of stricter cultivation standards.

He also expressed satisfaction over higher import demand from countries participating in the Regional Comprehensive Economic Partnership.

Like Hai, many Vietnamese farmers and companies are expanding their orchards and improving the quality of their fruit in order to boost their exports to China and other RCEP members.

The RCEP agreement, which entered into force a year ago, groups 10 countries of the Association of Southeast Asian Nations as well as China, Japan, South Korea, Australia and New Zealand. It aims to ultimately eliminate tariffs on over 90 percent of goods trading among its signatories over the next 20 years.

As the world grapples with the COVID-19 pandemic and multiple uncertainties, the implementation of the RCEP trade pact offers a timely boost to faster recovery and the long-term growth and prosperity of the region.

Timely boost to recovery

To increase exports to RCEP member countries, Vietnamese enterprises must innovate technology and improve design and product quality, Dinh Gia Nghia, deputy head of a food export company in the northern Ninh Binh province, told Xinhua News Agency.

"The RCEP has become a launching pad for us to increase product output and quality, as well as the quantity and the value of exports," he said.

Nghia estimates that in 2023, Vietnam's fruit and vegetable exports to China may increase by 20 to 30 percent, thanks mainly to smoother transport, quicker Customs clearance and more efficient and transparent regulations and procedures under the RCEP agreement, as well as e-commerce development.

Customs clearance has been shortened to six hours for agricultural products and within 48 hours for general goods under the RCEP agreement, a major boon for Thailand's export-dependent economy.

In the first nine months of 2022, Thailand's trade with RCEP member countries, which accounted for around 60 percent of its total foreign trade, rose 10.1 percent year-on-year to $252.73 billion, data from Thailand's Ministry of Commerce showed.

For Japan, the RCEP has brought the country and its largest trading partner China into the same free trade framework for the first time.

"Introducing zero tariffs when there is a large volume of trade will have the most significant effect on trade promotion," said Masahiro Morinaga, chief delegate of the Japan External Trade Organization's office in Chengdu, Sichuan province.

Japan's official data showed that the country's exports of agricultural, forestry and fishery products and food hit 1.12 trillion yen ($8.47 billion) for the 10 months through October last year. Among them, exports to the Chinese mainland accounted for 20.47 percent and increased by 24.5 percent from the same time a year earlier, ranking first in export volume.

In the first 11 months of 2022, China's imports and exports with RCEP members totaled 11.8 trillion yuan ($1.74 trillion), up 7.9 percent year-on-year.

"The RCEP has been a significant stand-out agreement in a time of great global trade uncertainty," said professor Peter Drysdale from the East Asian Bureau of Economic Research at Australian National University. "It pushes back against trade protectionism and fragmentation in 30 percent of the world economy and is a huge stabilizing factor in the global trading system."

According to an Asian Development Bank study, the RCEP will increase the member economies' incomes by 0.6 percent by 2030, adding $245 billion annually to regional income and 2.8 million jobs to regional employment.