While the United States has increased import tariffs even on its allies, the RCEP aims to eliminate 90 percent of intra-regional duties while standardizing customs and e-commerce rules.
by Kin Phea
The Regional Comprehensive Economic Partnership (RCEP) has emerged as a key advocate for free trade and multilateralism in the Asia-Pacific amid escalating protectionist policies, particularly from the United States.
The RCEP, which entered into force on Jan. 1, 2022, comprises 15 Asia-Pacific countries including 10 ASEAN member states -- Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam -- and their five trading partners, namely China, Japan, South Korea, Australia and New Zealand.
The world's largest trade pact covers 2.3 billion people, or 30 percent of the world's population, contributes 26.2 trillion U.S. dollars, about 30 percent of global GDP, and accounts for 28 percent of global trade in goods and services as well as 32.5 percent of global foreign direct investment inflows.
The U.S. shift toward protectionism, marked by tariffs on allies and industrial subsidies like the Inflation Reduction Act, has disrupted supply chains and created uncertainties.
Against this backdrop, the RCEP's third anniversary highlights its growing importance as a stabilizing force, fostering economic integration across the Asia-Pacific.
While the United States has increased import tariffs even on its allies, the RCEP aims to eliminate 90 percent of intra-regional duties while standardizing customs and e-commerce rules.
This framework streamlines commerce among ASEAN nations, China, Japan, South Korea, Australia and New Zealand. It has bolstered supply chain resilience, expanded business opportunities and narrowed development gaps in the region. It also reduces trade barriers for small and medium enterprises (SMEs) and multinationals alike.
Under such circumstances, SMEs have particularly prospered. For instance, Indonesia saw a 22-percent surge in SME exports to RCEP members in 2023, aided by digital trade provisions like paperless customs. Southeast Asian nations like Vietnam have also leveraged the RCEP to diversify exports.
For Cambodia, the RCEP serves as a pathway to economic modernization. For example, Toyota has set up vocational centers in Phnom Penh. Skills transfers in this process have enabled Cambodia to move beyond low-cost labor into automotive parts manufacturing.
Over the past three years since its inception, the RCEP has driven measurable progress. Intra-regional trade of RCEP members reached 5.6 trillion U.S. dollars.
As the RCEP's largest economy, China has played a key role. Projects under the Belt and Road Initiative like the China-Laos Railway halved cargo transit times between Kunming and Bangkok, while its advocacy for digital trade rules set standards for cross-border data flows.
In conclusion, in a world grappling with protectionism and geopolitical rivalries, the RCEP's focus on cooperation positions it as a stabilizing force. The pact's emphasis on inclusivity enhances its influence as a model for equitable multilateralism.
As global trade faces headwinds, the RCEP's inclusive framework offers a blueprint for regional stability, demonstrating that multilateralism, not fragmentation, remains the vital path to shared prosperity.
Editor's note: Kin Phea is director general of the International Relations Institute of Cambodia, a think tank under the Royal Academy of Cambodia.
The views expressed in this article are those of the author and do not necessarily reflect those of Xinhua News Agency.■