THE Regional Comprehensive Economic Partnership (RCEP) came into force on Jan 1 this year after years of negotiations.
Malaysia is now poised to become its 12th member in March after the successful submission of the Instrument of Ratification (IOR) to the ASEAN Secretariat on Jan 17 as mandated by the Cabinet on Jan 12.
“As provided under Article 20.6 of the RCEP Agreement which stipulates that the agreement will enter into force after 60 days of the IOR submission, the RCEP agreement will enter into force for Malaysia on March 18,” the International Trade and Industry Ministry (MITI) pointed out in a media statement.
“With this latest submission of IOR to the ASEAN secretariat as the depositary of RCEP, Malaysia will join the eleven other signatory countries, namely, Singapore, China, Japan, Brunei, Cambodia, Laos, Thailand, Vietnam, Australia, New Zealand and South Korea that have completed the ratification process,” the ministry said.
RCEP is the largest free trade agreement (FTA) in the world, covering 15 countries with 2.2 billion or nearly a third (29.5%) of the world’s population and representing US$25.8 tril or 29.4% of the world’s gross domestic product (GDP) based on the World Bank’s 2019 data.
According to MITI, RCEP is a testament to efforts to strengthen not only the multilateral trading system but advance regional economic integration and uphold the development agenda of the World Trade Organisation (WTO).
MITI says Malaysia is expected to be the largest beneficiary of the RCEP agreement in terms of gains in exports within the ASEAN.
It projects a US$200 mil increase in Malaysia’s exports within the ASEAN.
According to a report by UNCTAD published on Dec 15 last year, these gains will result from tariff elimination and reduction for merchandise goods, including the facilitation of export and import of goods among the RCEP countries.
Furthermore, service providers including e-commerce will be able to enjoy greater market access in terms of cross border supply and establishing a commercial presence in the RCEP markets.
With the COVID-19 pandemic shattering international trade and grinding export to a halt for some countries, the RCEP could be a key enabler for Malaysia, according to MITI.
“The pandemic has underscored the paramount importance of international trade and cooperation as well as the inter-linkages of regional supply chains,” observed MITI.
“In this regard, RCEP would be a key enabler for Malaysia in revitalising the domestic and international business activities, post-pandemic.”
“Business communities, from large to small scale entrepreneurs are encouraged to take advantage of the vast investment opportunities and greater participation in regional and global value chains presented by this mega-trade agreement.” – Jan 21, 2022
