Comprehensive Regional Economic Partnership (RCEP): the world's largest trade agreement
On November 15, 2020, the "largest trade agreement in the world", the Regional Comprehensive Economic Partnership (RCEP) was signed. This Partnership is a free trade agreement between the ten member countries of the Association of Southeast Asian Nations (ASEAN), Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Vietnam, Myanmar, Laos and Cambodia , and Australia, South Korea, Japan, New Zealand and China. TheI ndia even made parts of the negotiations, which lasted nearly a decade, but withdrew in November 2019, by internal pressures.
The importance and grandeur of the agreement
This agreement began to be negotiated at the 19th ASEAN Summit, in November 2011, and was concluded only in November 2019, where the countries agreed to sign it in the following year, 2020. The Partnership covers approximately 30% of the world population, 29.3% of the world Gross Domestic Product (GDP) and 27.4% of the world trade volume. The agreement focuses on the importance of the RCEP for economic recovery and the strengthening of trade in the region, in addition to establishing rules of common origins, given the post-pandemic crisis that many countries are already experiencing.
The RCEP is based on a free trade agreement, which some countries already have, and has a main objective, the reduction of trade tariffs on imports, up to 90% immediately and in the next ten years. In the agreement, there are details related to the reduction of tariffs in agriculture, financial services, e-commerce and intellectual property. According to the Peterson Institute for International Economics, in the US, it was estimated, in a June report (and with numbers before Covid 19), that the agreement would increase trade between members by up to 428 million dollars in 2030.
Benefits for Brazil and the world, albeit indirect
For some specialists, the consolidation of this agreement requires attention from Brazil, as China is the biggest trade partner. However, the Sino-Brazilian trade exchanges, in principle, should not be negatively affected, since there is no competition with Brazilian exported products, such as soy, iron ore, oil, beef, among others. Furthermore, they believe that, in the long term, it is possible that Brazil will indirectly benefit from the increase in global trade. Also according to experts, despite the agreement happen across the world, there are potential benefits for Latin American companies with a presence in Asia, which can take advantage of this great integration to expand their business in the region.
The importance of assistance from an international consultancy
In short, as said, this partnership can move international trade, first, in the region, and later, indirectly, throughout the world, and it is beneficial to be aware of these upcoming changes and, if applicable, also take advantage of them . For that, a good strategic planning like an international consultancy, an in-depth analysis and study of the countries in question is necessary, in order to enter the international market with more security and more assertiveness.
By Guilherme C Gomes on 12/8/2020