Japan’s parliament passed the Regional Comprehensive Economic Partnership (RCEP) agreement today, and it is expected that the RCEP will take effect at the end of the year at the earliest after the relevant countries complete their domestic review procedures, and the huge economic circle in Asia, which accounts for about 30% of the world’s gross domestic product (GDP), will soon take shape.
The Japan Economic News reported that the RCEP was passed by the plenary session of the Senate this morning. 15 countries from 10 countries of the Association of Southeast Asian Nations (ASEAN) plus China, Japan, South Korea, New Zealand and Australia participated in the RCEP, which can be said to be the first economic cooperation agreement (EPA) with China and South Korea for Japan.
The RCEP will enter into force 60 days after at least six ASEAN countries and three non-ASEAN countries have completed their respective domestic review procedures.
China and Singapore have already completed their domestic review procedures, and most countries are expected to complete them by the end of this year, so it could come into effect around the end of the year if it is soon.
Once RCEP is officially on the road, it will become the largest wide-area free trade agreement (FTA), accounting for about 30% of global GDP. In addition to reducing or cutting tariffs on industrial products and agricultural, forestry and aquatic products, the RCEP will also specify common norms for the international flow of data and the use of intellectual property rights, which will help Japanese companies collect big data in China.
The total tariff abolition rate of RCEP for industrial products and agricultural, forestry and fishery products is not as high as that of large FTAs such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), covering about 91% of items.
China and South Korea are expected to abolish tariffs on auto parts and other items in phases over a maximum period of about 20 years. The duty-free rate for industrial products will be increased from the current 8% to 86% in China and from 19% to 92% in South Korea.