The Regional Comprehensive Economic Partnership (RCEP) between China, Australia, New Zealand, South Korea, Japan and the ten members of ASEAN (Association of South-East Asian Nations) was signed on Sunday 15 November. The largest free trade agreement in history – which will likely come into force by mid-2021 – spans 15 Asian markets and creates a trade zone with a GDP that equals a third of the total world economic output. On the one hand, the agreement proves and reinforces the relentless shift of the global center of economic gravity to the East. On the other, the RCEP may prove to be a necessary tool for addressing the current crisis both in Asia and in the rest of the world. As pointed out by HSBC, although international trade continues to face a period of uncertainty, the signing of the Regional Comprehensive Economic Partnership highlights the belief in market openness and how this can be of benefit to the global economic growth. This was also stressed by Anna Tavano, Head of Global Banking for HSBC Italy, who pointed out in particular how RCEP will benefit Asia and how it can stimulate the recovery from the pandemic-induced crisis. According to the manager, the agreement indeed represents a significant step to further liberalize trade and investments in the region.
Furthermore, it is also important to appreciate HSBC’s commitment in the light of this: thanks to its international presence, the Group can provide a valuable contribution to corporate or institutional customers that have commercial interest in those markets of Asia and the Pacific participating in the signing of the RCEP. As indicated by HSBC, there will be an ever-increasing number of companies and customers having commercial interest in the Asian area, which is expected to keep pulling the economic center of gravity towards itself. This path is made even more viable by the fact that the RCEP will immediately eliminate tariffs on 65% of goods traded within the bloc. In addition, according to reports, the remaining part will be liberalized over the next 20 years, ultimately covering around 90% of trade within the signatory countries.
HSBC concluded that the result of this partnership is the largest FTA ever signed in history, a high-quality agreement that, among other things, also aims to tackle non-tariff trade barriers, particularly in sectors such as services, investment, e-commerce, competition, government procurement, intellectual property, and the movement of individuals.