The trade agreement allows China – by far the largest economy and the most populous country in the region – to call itself “a champion of globalization and multilateral cooperation,” Gareth Leather, Asia`s chief capital economic economist, said in a report. Vietnam, which chaired ASEAN at the time of the summit, handed over its responsibilities to Brunei at the closing ceremony. Vietnamese Prime Minister Nguyen Xuan Phuc said he was pleased with the agreement and said: “I am very pleased that after eight years of difficult negotiations, we are ending the Negotiations on the Comprehensive Regional Economic Partnership (RCEP) today and formally signing them at the 37th ASEAN Summit.” The RCEP will require the ratification of 6 of the 10 ASEAN member states and 3 of the five ASEAN-FTA partners for the agreement to enter into force. Therefore, the timing of implementation depends on the internal processes for ratification of the agreement by RCEP partners. Japanese Prime Minister Yoshihide Suga on Saturday reaffirmed his government`s support for “the expansion of a free and fair economic zone, including the possibility of India`s future return to the agreement, and hopes to win the support of other countries.” Southeast Asian heads of state and government met in Bangkok for a three-day, trade-dominated summit. ASEAN members are working to finalize a China-backed plan for the creation of the world`s largest free trade area. The RCEP agreement, signed eight years after negotiations began, covers 2.2 billion people and one-third of the global economy. Previously, the contract was expected to be signed in early 2020. Unlike the EU, THE AFTA does not apply common external tariffs to imported products. Any ASEAN member may impose tariffs on goods arriving from outside ASEAN on the basis of their national flight plans. However, for products originating in ASEAN, ASEAN members apply a fee of 0 to 5% (younger members from Cambodia, Laos, Myanmar and Vietnam, also known as CMLV countries, have been given additional time for the introduction of reduced tariffs). This is called the Common Effective Preferential Tariff (CEPT).
The most important mechanism for achieving these objectives is the common system of effective preferential tariffs, which established a gradual timetable in 1992 to increase the region`s competitive advantage as a global market-oriented production base. The ASEAN-Japan Comprehensive Economic Partnership (AJCEP) came into force in December 2008. The agreement covers trade in goods, trade in services, investment and economic cooperation. The free trade agreement provides for the abolition of tariffs on 87% of all tariff lines and includes a dispute resolution mechanism. It also allows the return of goods between Member States, the billing of goods by third parties and the accumulation of ASEAN.