RCEP Enhancing ASEAN Economic Resilience - Interview with Huang Jinrong, Professor of Economics at Raman University in Malaysia, Cost | Trade | Economy
Huang Jinrong, an economics professor at the University of Raman in Malaysia, recently stated in an interview with Xinhua News Agency that the Regional Comprehensive Economic Partnership (RCEP) has come into full force for 15 signatory countries, which will further reduce the cost of intra regional trade, promote cross-border trade among ASEAN countries, and enhance ASEAN's economic resilience against risks.
RCEP has recently entered into full force for 10 ASEAN countries and 15 signatory countries including Australia, China, Japan, South Korea, and New Zealand. This agreement covers all aspects of trade and investment liberalization and facilitation, and its key content is tariff reduction - over 90% of goods trade in the region will gradually achieve zero tariffs.
On March 18, 2022, RCEP came into effect for Malaysia. The Malaysian Ministry of Investment, Trade and Industry stated at the time that Malaysia was expected to become the ASEAN country that would benefit the most from RCEP in terms of export earnings. According to statistics from this department, Malaysia's trade volume with ASEAN countries, as well as China, Japan, South Korea, Australia, and New Zealand, all achieved rapid growth in 2022.
Huang Jinrong believes that zero tariffs bring great convenience to trade exchanges between some countries. "For example, China and Japan do not have a bilateral free trade agreement, but through RCEP, tariffs can be reduced from relatively high levels to zero, which has a significant impact on bilateral trade between China and Japan."
The cumulative rules of origin are a major highlight of RCEP. Huang Jinrong emphasized that for any participating country, the important benefit of RCEP is the unification of rules of origin. Malaysia has participated in various multilateral and bilateral trade agreements, and through the unification of RCEP rules of origin, it can significantly simplify procedures and save trade costs. This will inevitably lead to the effect of regional production value chain restructuring.
When it comes to the impact of RCEP on ASEAN, Huang Jinrong believes that the unified rules of RCEP can help increase the cross-border trade volume of ASEAN countries, enhance the resilience of ASEAN's industrial chain, especially in times of unstable external economic environment, RCEP enhances ASEAN's ability to resist external risks.
Huang Jinrong said that the economic development levels of ASEAN countries are different, which can meet the different needs of resources, knowledge, manpower, and other aspects of the industrial chain, enabling ASEAN countries to better leverage their production cost advantages. With the continuous implementation and improvement of the RCEP mechanism, the competitiveness of the region will be further enhanced and it will become a more important global industrial chain hub in the future.
Huang Jinrong pointed out that as the fifth largest economy in the world, ASEAN can strengthen its position in the international economic system through RCEP and play a key role in connecting the economies of the Asia Pacific region.