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 BS ACCOUNTANCY
TOPIC 1
Regional Comprehensive
Economic Partnership International Business
and Trade
TOPIC 2 (RCEP)

TOPIC 3

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04/01/21
TOPIC 1

GRADE LEVEL

TOPIC 2 SUBJECT

TOPIC 3

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04/01/21
 WHAT IS RCEP?
• The Regional Comprehensive Economic Partnership (RCEP) Agreement is
an agreement between ASEAN members and their Free Trade Agreement
(FTA).
Members of ASEAN: Members of FTA:
• Brunei • Australia
• Philippines
• Cambodia • • China
Singapore
• Indonesia • Thailand • Japan
• Laos • Vietnam • Korea
• Malaysia • New Zealand

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 WHAT IS RCEP?
• The 15 member countries account for about 30% of the world's
population (2.2 billion people) and 30% of global GDP ($26.2 trillion) as
of 2020, making it the biggest trade bloc in history
• RCEP was introduced to countries during the 19th ASEAN meeting which
was held in November 2011 and all countries participated aim to finish and
sign the agreement by November 2019.
• The participating countries signed the agreement on November 15, 2020 at
Vietnam ASEAN Summit. After it has been ratified by signatories it will
take effect after 60 days..
• RCEP proposed to eliminate as much as 90% of the tariffs on the imports
of goods and services between the members of RCEP within 20 years of
coming into effect, which could be early as this year (2021).

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 WHY IS WAS CREATED?
• RCEP was created in order to strengthen the economic
relations, improve the activities related to trade and
investments, and to help in reducing the development
gap between the parties. It also aims to create a market
wherein trading of products and services between the 15
members will be easier and available across the
countries.
• The agreement will facilitate international trade and
reduces the costs of exporting in the members of RCEP

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RCEP COVERS
i. Manufacturing
ii. Services
iii. Intellectual Property
iv. Health
v. Energy
vi. Education
vii. Internet Economy
viii. Public Services
ix. Foreign Investments

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OBJECTIVE OF RCEP

• establish a modern, comprehensive, high-

quality, and mutually beneficial economic
partnership that will facilitate the expansion
of regional trade and investment and
contribute to global economic growth and
development

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 4 KEY FEATURES OF THE RCEP AGREEMENT

1. Modern. - The RCEP Agreement is an agreement not

made just for today but is also an agreement for
tomorrow.
2. Comprehensive. - The RCEP Agreement is
comprehensive, in terms of both coverage and depth of
commitments.
3. High-Quality. - The RCEP Agreement contains
provisions that go beyond the existing ASEAN Plus One
FTAs, while recognizing the individual and diverse levels
of development and economic needs of the RCEP Parties.
4. Mutually beneficial. - The RCEP Agreement brings
together countries with diverse levels of development.

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Some of the features of RCEP agreements are granting national
treatment to the goods of the other parties and reduction or
elimination of customs duties. These means that the imported
goods, services, and intellectual properties such as patent and
trademark of the member countries will treat the same way as
they treat their own as well as the tariffs of these imported
products and services will be lessen because of the agreement
among parties. Additionally, it also consists duty-free temporary
admission of goods and non-tariff measures that complement
"tariff liberalization outcomes”. These include general
elimination of quantitative restrictions, greater transparency on
application of non-tariff measures, administration of import
licensing procedures, and application of fees and formalities
connected with importation and exportation.

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 ADVANTAGES OF RCEP
• The RCEP provides for consistent rules of origin across the treaty area. This means that goods
partially originating in one country can use the same rules to determine if those goods truly
originate there whether they are shipping to Australia or Vietnam. This eliminates the need to
consult numerous FTAs and adapt different procedures for different countries in the RCEP for
the same goods. In addition to rules simplifying import/export processes and costs, the
simplified rules of origin will reduce time and expenses for Vietnamese exporters, thus
increasing profit margins and making Vietnamese goods more competitive in RCEP markets.
• The RCEP also standardizes rules regarding the preservation of trade competition. Provisions
for anti-dumping and countervailing duties are allowed and made consistent across the region.
This will supersede domestic trade remedies. Interestingly, the RCEP does not create a
dispute settlement mechanism to challenge a country’s imposition of trade remedies against
another member state.
• The RCEP also removes certain restrictions in the telecommunications, finance, and
professional service sectors, making it easier for service providers of member states to cross
borders and open up shop in other member states. The addition of new tariffs on goods are
prohibited and investment guarantees are codified to preserve cross-border FDI.

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 DISADVANTAGES OF RCEP
• In addition to opening RCEP countries to trade in services, the agreement applies
national status in trade in goods for all goods allowed under Article III of GATT
1994. While this doesn’t change much for inter-ASEAN trade, it does reduce tariffs
of many RCEP countries for Chinese goods. Vietnamese producers will be forced to
compete, domestically, with a new range of lower cost goods from China. This will
force Vietnamese producers to either reduce prices, and profits, to compete with
imported goods from a supply chain that is larger and more established. Though
limited, there are some industries that will be hit by this reduction in tariffs.
• Another disadvantage comes from the entry–for the first time–of Japan and China
into an FTA between the two parties. By reducing tariffs and competition for
Chinese goods in Japan, those goods sourced from China will enter into direct
competition with Vietnamese goods exported to Japan. This means that, in one of
Vietnam’s largest export markets, direct competition with China will commence
and cause hardship for some exporters who cannot set prices competitively with the
powerhouse to the north.

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INDIA LEAVE RCEP AGREEMENT
• In 2019, India announces that they will be leaving the negotiations
because their domestic industries might be devasted by cheaper
manufactured products, and agricultural products from China, Australia
and New Zealand.
• Prime Minister Narendra Modi, in his speech at the RCEP Summit said
"the present form of the RCEP agreement does not fully reflect the basic
spirit and the agreed guiding principles of RCEP. It also does not
address satisfactorily India's outstanding issues and concerns in such a
situation.“
• There was a dread in India that its local industries would be not able to
compete China and Chinese merchandise would flood Indian business
sectors. India's farmers were additionally stressed given that they would
be not able to compete on a worldwide scale.
• Regardless of India’s decision to leave the RCEP the 15 countries
continued the agreement and they said that India can still rejoin the
RCEP.

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04/01/21
 WHAT DOES RCEP DOES?
• In 2019, India announces that they will be leaving the negotiations because their
domestic industries might be devasted by cheaper manufactured products, and
agricultural products from China, Australia and New Zealand.
• Prime Minister Narendra Modi, in his speech at the RCEP Summit said "the
present form of the RCEP agreement does not fully reflect the basic spirit and the
agreed guiding principles of RCEP. It also does not address satisfactorily India's
outstanding issues and concerns in such a situation.“
• There was a dread in India that its local industries would be not able to compete
China and Chinese merchandise would flood Indian business sectors. India's
farmers were additionally stressed given that they would be not able to compete on
a worldwide scale.
• Regardless of India’s decision to leave the RCEP the 15 countries continued the
agreement and they said that India can still rejoin the RCEP.

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 WHAT DOES RCEP DOES?
The agreement also helps to promote competition in markets and enhance economic efficiency
and consumer welfare. Parties have the obligation to maintain competition laws and regulations
that prohibits anti-competitive activities and to establish or maintain authorities to implement its
competition laws. Furthermore, the agreement protects intellectual property rights and
established a provision relating to technological protection measures and enforcement in the
digital environment, as well as appropriate criminal procedures and penalties against
unauthorized copying of a cinematographic work on a commercial scale.

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 WHAT DOES RCEP DOES?
Aside from these, RCEP aims to provides effective, efficient, and transparent rules and procedures for
settlement of disputes. The process of settlement of dispute includes:

i. choice of forum; as it allows the Complaining Party to select the forum within which to address a dispute

ii. consultations; as it requires the Responding Party to first enter into consultations with a Complaining
Party, if requested.

iii. good offices, conciliation, or mediation;

iv. establishment of a panel; as it allows the Complaining Party to request the establishment of a panel to
resolve a dispute in circumstances where the Responding Party does not reply to a request for
consultations or does not enter into consultations within the stipulated time line, or where consultations
have failed to resolve the dispute within the stipulated time line.

v. rights for interested third parties

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 HOW DOES IT HELPS MEMBER COUNTRIES’ ECONOMY
• RCEP agreement can help reduced trade barriers thus this can have a positive impact to every
member country for the reason that, product and services offered will reduced their cost because
of the availably of resources across regions and we can avail these at a lower price due to
elimination of tariffs and non-tariffs barriers.
• The RCEP member countries' wide consumer markets would result in an increase in trade in
Asia-Pacific, as well as creating new business opportunities for member countries' companies to
grow their investments and overseas market share. For example, ASEAN nations can take in
more processing and manufacturing industries by attracting more industrial investments from
Japan, South Korea and China, in order to more deeply engage in the global industrial supply
chains. Japanese, South Korean and Australian enterprises can secure more opportunities to
access the ASEAN and Chinese markets. China and the ASEAN nations can also freely and
conveniently access the markets of Japan, South Korea and Australia through the agreement.
• RCEP proposed to eliminate as much as 90% of the tariffs on the imports of goods and services
between the members of RCEP within 20 years of coming into effect, which could be early as this
year (2021).

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04/01/21
 HOW DOES IT HELPS MEMBER COUNTRIES’ ECONOMY

• China is the biggest winner in terms of economic development and geopolitics. Being part of the
RCEP is advantageous to China in the face of the triple threat of the China-US trade war,
geopolitical changes and global recession due to Covid-19. It also offers China more room to
manoeuvre in the China-US trade war and as China’s diplomatic relations with the world
deteriorate. Its implementation will help China’s export enterprises expand their overseas market
share and bring about expectations of stability. China will also have closer economic and trade ties
with Asia-Pacific, including ASEAN.
• The RCEP agreement reflects China’s rising economic and political influence in Asia-Pacific. The
efforts to promote free trade and regional economic integration in Asia-Pacific are indicative of the
rivalry between China and the US. Although the US is not an RCEP member nation, there are
several close US allies, such as Japan, Australia, New Zealand and South Korea which have
surprisingly chosen to sign the RCEP agreement as scheduled, thus paving the way for smooth
implementation.

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 GROUP NUMBER
The negotiation has a big help in the economy for the
following reasons
• the manufacturers in the country can get cheaper
imported goods, raw materials, and other products from GRADE LEVEL
other member countriesINSERT TEXTRCEP.
of the OR PICTURE

• RCEP simplified the rules for businesses and investors,

and there will be a clear mechanism on transparency and
consultation related to issues in trade and trading partners.
SUBJECT
• Participating countries will have uniform rules for
protecting the intellectual property rights.

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 • Compared with high-level regional FTAs such as the Comprehensive and
GROUP NUMBER
Progressive Trans-Pacific Partnership (CPTPP) agreement, the RCEP agreement
firstly lacks depth and breadth in free trade. Second, it is less open in market
access for the services trade and industrial investments. Third, the RCEP
TOPIC 1 negotiations were focused on the traditional issues, with little attention to
new rules formulation. For example, the agreement excludes important issues
such as state-owned enterprises, labour standards, government procurement
GRADE
and environmental protection, which are the important LEVEL
issues of concern in
establishing a high-level regional free trade zone.
• Therefore, the RCEP cannot achieve the goal of driving the reform of the rules
of the global economy and trade. Its main goal is to help member nations deal
TOPIC 2 with the challenges of a global economic downturn and declining global
SUBJECT
market demand by accelerating regional economic integration. By concluding
the RCEP agreement, market access among member nations can be improved
and the sectors for two-way investments can be increased, thereby growing
regional trade and investments.

TOPIC 3

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 GROUP NUMBER
TOPIC 1

GRADE LEVEL

TOPIC 2
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TOPIC 3

10:00 AM
04/01/21