The Regional Comprehensive Economic Partnership(RCEP), involving 15 countries - South Korea, the ten members of the Association of Southeast Asian Nations(ASEAN), China, Japan, New Zealand and Australia - was launched following an online signing on November 15, forewarning of a large transition in global trade.
The RCEP is a world-leading mega FTA, with participating nations' trade volume, population and nominal gross domestic product making up 30 percent of the world's total.
The pact will take effect 60 days after at least six of ten ASEAN members and three of five non-ASEAN nations ratify it and submit their ratification instruments. The South Korean government expects the RCEP to come into force as early as the first half of 2021.
After negotiations were officially launched at the ASEAN Summit in Cambodia in November 2012, 31 rounds of official negotiations, 19 ministerial talks and four summit meetings took place over a period of eight years, before the RCEP was signed. The objective of the pact is to vitalize trade by lowering the tariff barrier between member nations and establishing a systematic trade and investment regime.
For South Korea, the RCEP is expected to have an effect similar to that of a bilateral FTA with Japan, while expanding the scope of the opening of the market and raising its level with ASEAN. No big change in market opening is expected with China, Australia and New Zealand.
However, the fact that the RCEP is considered a China-led economic bloc amid a trade hegemonic race between the U.S. and China is a burden for South Korea.
Therefore, attention is drawn towards how the incoming Joe Biden administration in the U.S. will respond.
Photo : YONHAP News