Royal University of Phnom Penh

Institute of Foreign Language

Department of International Studies

The Impacts of RCEP (Regional Comprehensive Economic Partnership) on its member

states

Class: M1.1

Course: AWA 101

Lecturer: Pen Socheata

Group 1

Noch Sreypich

Khiev Sovankanika

Kuch Sarita

Khim Sokunthy

Academic Year: 2021-2022

 Table of Contents
I. Introduction
a. Definition of economic groupings
b. Definition of Regional Comprehensive Economic Partnership (RCEP)? 
c. What are the impacts of RCEP on its member states?
I. Body
1. A brief overview of Regional Comprehensive Economic Partnership (RCEP)
2. Security Impacts
3. Economic Impacts
4. Social Impacts
II. Conclusion
III. References

a.
 I. Introduction
By definition, economic groupings may be defined as the coming together of
different countries with a common economic interest and goals with promoting comic
cooperation and development among member states. As such the Regional
Comprehensive Economic Partnership (RCEP) was proposed to unite and create an
integrated market between the member of the Association of Southeast Asian Nations
(ASEAN) and its free trade agreement (FTA) partners. This essay aims to discuss the
impacts that the Regional Comprehensive Economic Partnership (RCEP) has on its
member states regarding security and economic and social factors.
II. Body
1. A brief overview of Regional Comprehensive Economic Partnership (RCEP)
To start with the Regional Comprehensive Economic Partnership (RCEP) was
first unveiled at the 19th ASEAN meeting in November 2011. It was recently completed
on November 15, 2020, and becomes the world’s largest regional free trade agreement
(FTA). This treaty encompasses ten ASEAN members (Brunei Darussalam, Cambodia,
Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and
Vietnam) and five regional ASEAN dialogue partner countries with which ASEAN has
existing FTAs (Australia, China, Japan, the Republic of Korea, and New Zealand)
(Shandre Mugan Thangavelu, Shujiro Urata, and Dionisius A. Narjoko, 2021).
The Regional Comprehensive Economic Partnership (RCEP) aspires to create a
united market between sixteen countries making it easier for each of these countries’
products and services to be available throughout the region. RCEP will cover trade in
goods, trade in services, investment, economic and technical cooperation, intellectual
property, competition, dispute settlement, and other issues (Anna Robeniol, 2012).

2. Security Impacts
RCEP has taken effect as the world’s largest free trade agreement it covers 30 of
global economic output signed in late 2020. It will hopefully provide a badly needed
uplift to the global economy which is still recovering from the impact of the covid19
pandemic. The biggest impact of RCEP could be the new ‘rule of origin’ which officially
determine where a product was made. These essentially eliminate tariffs on goods traded
between states, providing greater simplicity than a series of bilateral free trade
agreements, especially for companies with global supply chains. The trade deal could
also lay the foundations for stronger economic partnerships in the future, particularly
between members that don’t have a free trade deal, as is the case with China, Japan, and
South Korea. The RCEP could also strengthen China’s global infrastructure strategy,
known as the Belt and Road initiative while reducing U.S. commercial activity in the
region. The finalization of the deal comes around a year after India announced its
decision to not join the grouping mainly because the term is in China’s favor. The deal
would allow Chinese goods to export to Indian markets, threatening domestic industries.
Made in China products may find a better way to enter member countries within the
region since factors will be improved as a result of the agreement. Making China RCEP
is important for Asia, but it also gives other countries around the world something to
inspire because when you see such a trading bloc that is willing to work together, they are
going to boost overall gross domestic product products. Many Asian Nations, and China
in particular are increasingly committed to better trade links, which could shape the
economic and political landscape for years to come.

3. Economic Impacts
It is said that given the mere economic and population size of this free trade zone
– with almost 30% of the world’s population and almost 29% of world production – it
will be able to set international standards. Standards are of enormous relevance,
especially in international trade. Of course, this also has an impact on the economy: firms
that want to export to these markets must ultimately comply with the standards there. The
situation will be similar for firms that want to export to the RCEP countries. And a large
market can set standards by itself: One can well imagine that it would make little sense
for a small country like Luxembourg to have its own plug standard. However, the trade
diversion is negative: original trade relations are reduced or abandoned in favor of the
zone’s internal trading partners. For example, high-tech good costs 1000 euros in Europe,
converted to 1100 euros in Japan and 1200 euros in China. If China and Japan join forces
in a free trade zone such as RCEP and abolish tariffs on these goods among themselves,
the goods from Europe will still cost 1150 euros in China, but the Japanese goods will
only cost 1100 euros. The trade creation is that there is now trade between Japan and
China that did not exist before – this is positive because Japan produces more efficiently
than China.
With the RCEP conclusion and the implementation of the 11-nation
Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in
ratified countries, Asia now can harness two mega-FTAs to drive forward deep
integration in the region. A merger of RCEP and CPTPP will strengthen “ASEAN
Centrality” while also laying the groundwork for the establishment of a truly inclusive
Free Trade Area of the Asia-Pacific, a long-held and aspirational goal of Asian economic
regionalism.

4. Social Impacts
Before RCEP there were multiple FTAs with different rules. Development and
trade in each country were more specific with their set of rules in manufacturing which
give the people more jobs and opportunities to work and make money instead of just
importing goods from other countries into their own. However, RCEP is a single
agreement that provides a common rule of origin across all member states, which means
everyone agrees and sticks to the same rule instead of making their own sets of rules. But
before RCEP the tax or tariff with trading and investment were higher. On the other hand,
The RCEP agreement will eliminate tariffs/taxes on more than 90% of goods over the
next 10 to 15 years to promote free trade. Before RCEP there were still a lot of issues
involving property protection. Shipping or relocating products to other countries was also
not quite easy before RCEP was established. In conclusion, we can see that there were
several free trade agreements (FTAs) in place before the RCEP, each with its own set of
norms.
RCEP created new trade opportunities among Asian countries, increasing and
stabilizing the region’s economic recovery. There are many social impacts after RCEP
that benefit all equally; It also helps support sustainable development. It plays a strong
and important role in boosting trade and investment linkage and it also supports industrial
growth by relocating products to lower-cost countries. Other social impacts we have after
RCEP are related to poverty, since the RCEP agreement has been established many
 countries in ASEAN are provided with the opportunities to join more into intra-regional
development because of our involvement with developed (e.g.: Japan) and developing
countries such as (China) that is also in RCEP. Thanks to RCEP, trade deals are
negotiated more honorably. Lastly, the social impact of RCEP is that instead of relying
on governments and NGOs to implement positive change, people move more towards
investing in businesses, and trades of the RCEP agreement that mutually benefit both the
economy and the development of their society. As a result, we witness the fact that the
RCEP opened up new trade opportunities for Asian countries, boosting and stabilizing
the region’s economic recovery which resulted in many social impacts.

III. Conclusion
In light of this information, we can fully understand the significance that the Regional
Comprehensive Economic Partnership has on its member states when it comes to security and
economic and social factors. In our opinion, we believe that Cambodia joining this economic
grouping is a great decision as it helped improve the country’s economy to newer heights in
addition to the benefits that were received to alleviate the economic stagnation resulting from the
pandemic.
IV. References
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 Shandre Mugan Thangavelu, Shujiro Urata, and Dionisius A. Narjoko. (2021, July 01).
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