In November, 2020, 15 countries in the Asia-Pacific region – including the 10 member states of the Association of Southeast Asian Nations (ASEAN) as well as China, Australia, Japan, New Zealand, and South Korea – signed the landmark Regional Comprehensive Economic Partnership (RCEP) on the final day of the 37th ASEAN Summit. Xianbai Ji, writing in The Diplomat, calls the RCEP “a high-quality, forward-looking trade deal designed for 21st century international commerce.”
RCEP now requires ratification by at least six ASEAN countries and three other member states. Ratification is seen to be likely in 2021 or early 2022.
RCEP economies to be 50% of global GDP by 2030
As Thailand Business details – the RCEP creates a new and very large pan-Asia economic bloc – which is larger than the US-Mexico-Canada trade bloc (USTR) and the EU. RCEP encompasses 1/3 of the world’s economy and population – with a market of 2.2 billion people – and $26.2 trillion USD in global output.
As I detailed previously on Asia Law Portal — The World Bank and the International Monetary Fund (IMF) recently detailed that by 2024 – Asia will be home to 4 of the world’s top 5 economies. China, the United States, India, Japan, and Indonesia — will be those top 5 economies, in this order, by that time.
And HSBC predicts that by 2030 – the 15 RCEP economies will expand to account for 50% of global GDP.
Knowledgeable of RCEP required for corporate success
Benjamin Cooper of Hill & Knowlton Strategies explains that the RCEP is seen as likely to create deeper regional integration – and that for companies doing business in the region – their success dependent upon how they navigate this emerging RCEP trade landscape.
While not seen as a groundbreaking treaty – the sheer scale of RCEP – and the inertia toward APAC region economic integration — creates a significance, as Cooper explains – and business operating in the region will be required to be adept to the treaty which will impact their activities.
Cooper recommends that companies acquire an “in-depth understanding” of RCEP and determine how it will impact their operations “across various time horizons” – and take a “forward-thinking approach” as integral to “effectively maximiz[ing] the benefits available to their business while minimizing any potential risks as the world’s largest free trade pact takes shape in the coming years.”
Some law firms taking the lead in publishing about RCEP
Some forward-thinking law firms have taken Cooper’s advice and already begun to publish about RCEP and its implications for companies doing business or interested in doing business in the region.
- BLawyers Vietnam have written about how RCEP will impact the Vietnamese economy;
- Baker & McKenzie Partner Anne Petterd explained to LawyersWeekly how RCEP “will be significant not just for trade lawyers but also those practising in labour law, IP, competition, government procurement and investment”;
- Allen & Overy recently published a guide to “Ten things for lawyers to know about the RCEP”;
- CMS published an overview of the RCEP;
- White & Case published a review of the key provisions of RCEP;
- Herrera & Partners have written about RCEP will impact Thailand, and
- KPMG hosted a recent webinar providing an overview of RCEP.
These law firms are among the first firms to begin publishing preliminary information about RCEP. There’s much more that can be done and likely will be done by law firms seeking to become a key conduit for the world’s companies interested in entering or expanding operations in Asia.