Study by: Austrian Institute of Economic Research – Copenhagen Economics
Online since: 10.08.2021 0:00
15 countries signed the Regional Comprehensive Economic Partnership (RCEP) on 15 November 2020. Upon ratification, it will
become the largest preferential trade agreement by economic output in the world, with the potential to increase trade and
integration among the economies of East Asia. This briefing presents the structure and the content of the agreement, its relationship
to existing cooperation in the region, and discusses important economic and political implications. Several notable takeaways
stand out. First, we highlight the economic and political significance of RCEP for the region stressing that it is the culmination
of past efforts by East Asian countries to pursue economic integration. Second, we show that the agreement itself is considerably
less ambitious than comparable agreements such as the Comprehensive and Progressive Transpacific Partnership (CPTPP) and European
Union Free Trade Agreements with Asian countries. Third, we document that the final legal text itself does not seem to be
dominated by any specific party. Fourth, despite its lack of ambition, the agreement is still expected to provide substantial
trade gains for signatories, especially if it helps to consolidate global supply chains based in the region. Fifth, because
of its structure, it is likely to be an important focal point for trade liberalisation in the future providing European companies
with important opportunities.
Research group:Industrial, Innovation and International Economics