Cambodia has signed the Regional Comprehensive Economic Partnership (RCEP) free trade agreement, one of the largest pacts ever.
On November 15, the long waited RCEP free trade agreement between 15 countries was signed online at the 4th RCEP summit during the 37th ASEAN summit in Vietnam after eight years of negotiation.
The Regional Comprehensive Economic Partnership (RCEP) is a free trade agreement established to reduce tariffs on agricultural and manufactured goods and establish new rules on intellectual property rights, temporary migrant workers, investment and other issued in Asia.
The RCEP consists of Australia, China, Japan, South Korea, New Zealand and the 10 ASEAN members (Brunei, Cambodia, Indonesia, Laos, Myanmar, Philippines, Singapore, Thailand and Vietnam).
The RCEP covers a population combination of over 2.1 billion people and 30% of the global GDP, making it one of the largest trade agreements.
Originally, India was also a member; however, India pulled out in November 2019 because of concerns regarding potential negative impact on the local market.
The RCEP will open up new market opportunities for Cambodia and is the first trade agreement which will enable Cambodia to enjoy nearly free market access to a combined market. In the next 20 years, the RCEP is expected to remove a number of tariffs on imported products.
The RCEP agreement covers the trade in goods, trade in services, investment, trade facilitation, sanitary and phytosanitary measures, technical barriers to trade, e-commerce, rule of origin and dispute settlement to intellectual property.
The Peterson Institute for International Economics estimated that the agreement could increase the global national income by USD 186 billion by 2030 and add 0.2% to the member states’ economy.
Hong Vanak, Royal Academy of Cambodia economic researcher, said the RCEP agreement will encourage commercial exchange among the country members and function as a driving engine for the manufacturing sector.
Countries that have joined the RCEP will benefit from opportunities to export to other members and attract more investment in the member countries.