RCEP free trade agreement to take effect for 10 countries on Jan 1

BUSINESSES in 10 regional countries will now be able to enjoy tariff elimination benefits and preferential market access for products from China, Japan and Australia.

The move comes after Australia, Brunei, Cambodia, China, Japan, Laos, New Zealand, Singapore, Thailand and Vietnam ratified the Regional Comprehensive Economic Partnership (RCEP) agreement, which takes effect on Saturday (Jan 1).

Under the RCEP agreement, businesses will be able to enjoy tariff elimination for about 92 per cent of goods traded among the participating countries, Singapore's Ministry of Trade and Industry (MTI) said in a press statement.

This is on top of preferential market access for specific products in selected RCEP markets such as China and Japan. These specific products include mineral fuels, plastics, other chemical products, miscellaneous food preparations and beverages, MTI said.

There will also be enhanced commitments above existing Asean Plus One free trade agreements (FTAs) in some sectors. Investors will be able to benefit from commitments to prohibit performance requirements and provisions that lock in the future relaxation of measures, MTI added.

The RCEP builds on existing bilateral agreements that Asean has with its free trade partners, covering 30 per cent of global gross domestic product worth US$26 trillion.

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Intellectual property, competition policy, e-commerce, government procurement and small and medium-sized enterprises are some of the new areas included in the agreement.

Minister for Trade and Industry Gan Kim Yong noted that during outreach events, many Singapore businesses indicated that they were keen to explore utilising the RCEP agreement.

"We look forward to the swift ratification of the RCEP by all remaining parties so that the full potential of the agreement can be realised."

The remaining parties which have yet to ratify the agreement include Indonesia, Malaysia, Myanmar and the Philippines. South Korea has ratified it and it will take effect for them in February. The RCEP agreement will enter into force for the countries 60 days after they have deposited their instrument of ratification.

RCEP negotiations were formally launched at the 2012 Asean Summit in Cambodia. The agreement was signed on Nov 15, 2020, and the quorum for entry into force was met in November 2021.

Singapore was the first RCEP participating country to complete the official ratification process, said MTI in April 2021.

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