WORLD’S BIGGEST FREE TRADE BLOCK BECAME EFFECTIVE IN ASIA-PACIFIC FROM 1 JAN 2022
By Siulan Law Mathews DipWSET
Credit: Teng Yuhong/Unsplash
Trade barriers between most countries in the Asia Pacific has been lowered from 1 January 2022 as the Regional Comprehensive Economic Partnership (RCEP) became effective.
Being an important trade deal between the 10-member Association of Southeast Asian Nations – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam – as well as China, Japan, South Korea, Australia and New Zealand, RECP is the world's largest free trade bloc.
The block covers about 30 per cent of global gross domestic product (GDP), worth USD26.2 trillion, and nearly a third of the world's population, amounts to some 2.2 billion people.
By comparison, the United States-Mexico-Canada trade agreement covers 28 percent of global GDP, while the European Union's Single Market at nearly 18 percent.
Under RCEP, around 90 percent of trade tariffs within the bloc will eventually be eliminated. The block members will follow common rules around trade, intellectual property, e-commerce and competition in a move the United Nations (UN) said would raise the Asia-Pacific region's position as a "center of gravity" for global commerce.
In a recent analysis of the deal, the UN's trade department said RCEP would boost inter-regional trade by USD42 billion.
The deal, however, covers mostly manufacturing goods and falls short on agricultural produce.
Though grapes and wines are not currently covered by the trade deal, it is still welcomed by the wine industry of Australia, which is the biggest wine producing country within the block.
Tony Battaglene, Chief Executive of Australian Grape and Wine, said RCEP markets represented around half of the total value of Australia’s wine exports, and the RCEP deal presented an opportunity to further liberalise markets across some of the most dynamic emerging markets in the Asia-Pacific region.
“It also provides a platform for strategic dialogue on mutually beneficial economic and trade issues in the future,” Battaglene added.
He said Australia’s grapegrowers and winemakers are looking for opportunities to recover and thrive in the future and RCEP provides exactly that opportunity.
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