The signing of this free trade agreement between the member nations is a historic milestone in the development of free trade blocs around the world. The overall aim of the Regional Comprehensive Economic Partnership is to cover the trade of not only goods but also services and intellectual property between member nations around the globe. This is one of the world's most important free trade agreements because it consists of such a large number of important trading hubs, partners, and nation-states on the globe. Most member nations have come together in the hopes of fostering trade but also developing a relationship that can help impact investment, intellectual property, dispute settlements, and the growing category of eCommerce for both small and large enterprises, as well as overall cooperation between the region.
The RCEP Contains Nations That Makeup 30% of The Global GDP ($26.2 Trillion)
Currently, the members that have gone through with signing the RCEP account for approximately 30% of the global GDP, which is estimated to be around 26.2 trillion dollars. These numbers continue to rise every year as a continued collaboration between member nations fosters greater and greater access and easier methods of doing business. As you may have suspected, China's role in the RCEP is a dominant one. Because this agreement was initially pushed by the Chinese central government of Beijing, they maintain a dominant position as a leader and facilitator of this agreement around the world.
Even though the RCEP shows great promise as being one of the most lucrative free trade agreements ever created, there has been some skepticism expressed by nations like India who suggest that local Indian manufacturers and small Indian enterprises will not be able to compete with other member nations on a global scale. However, even so, the RCEP intends to open up huge markets for other member nations in other territories, particularly, the service industry, e-commerce, as well as the burgeoning FinTech Market. The first industries to see a significant increase in revenue from the initiation of the RCEP will be Chinese wholesalers, Chinese manufacturers, and Chinese resellers looking to spread their products to buyers in other parts of the world.
Regional Comprehensive Economic Partnership Creates A Trade Bloc That Rivals The European Union and the U.S.-Mexico-Canada Agreement
The sheer size and scale of the regional comprehensive economic partnership establishes a trade agreement that dwarfs both the European Union and the US Mexico Canada agreement formally known as NAFTA. The implications of such a large trade block inserting its power and benefits around the world offer incredible opportunities for both small and large enterprises. Known as a mammoth Trade Agreement, it creates a new paradigm for what foreign investors, manufacturers, retailers, and financial service providers can expect from other agreements in the years to come.
Nearly a decade in the making, the RCEP has taken a lot of criticisms and adjustments that make it one of the most sophisticated free trade agreements to ever come out of a Nation. By virtually eliminating tariffs on 92% of traded goods, member nations now have free trade agreements with each other, without having to go through the process of individually speaking to countries one at a time.
Additionally, any free trade agreements that exist among member nations currently are guaranteed to not be as simple and easy to implement as the RCEP. This agreement has been credited with being a simple agreement with straightforward language that allows member nations to seamlessly strategize on expanding their trade volume around the globe.
Why The United States Pulling Out of The Trans-Pacific Partnership Created Renewed Interest For The RCEP In 2017
Previously there was another Mammoth Trade Agreement known as the trans-pacific partnership or TPP. This trans-pacific partnership previously excluded China. Therefore, many individuals look at the RCEP as an alternative to the trans-pacific partnership which instead of being backed by the United States, is backed by China. When Donald Trump withdrew the United States of America from the TPP in 2017, it created a space for the RCEP to make a name for itself.
Capitalizing on this opportunity, China quickly promoted interest in the RCEP to many Asian nations around the globe, as well as Southeast Asian Nations like New Zealand and Australia. While the agreement is very equitable in nature, many other nations fear that this is an opportunity for Beijing to simply flood local markets with Chinese products.
If local manufacturers, distributors, and retailers cannot compete with Chinese manufacturers, the RCEP will be yet another advantage in the global Marketplace for China. Beijing initiated heavy talks and discussions between RCEP members and potential members to assure them this would not be the case and to set limitations in place to prevent that. One of the most inspiring features of the RCEP is that it has been able to bring together countries that in the past have traditionally had bad relationships, a lack of communication, and just an overall tough diplomatic relationship. As more and more Nations come together through the RCEP, the world can look forward to lower-priced goods, faster shipping times, high manufacturing standards, and overall greater quality of merchandise shipped at lower prices overall.
Benefits of RCEP
The benefits are very clear for Chinese President Xi Jinping. The RCEP will allow Chinese wholesale merchandise to be shipped all around the ASEAN region, with little to no regulation. However, what are some of the benefits that other member nations might also take advantage of? Through deep research into the RCEP, we've discovered four critical benefits that can help smaller enterprises and nation-states compete with the enormous economic force of the Chinese government.
Eliminate Tariffs on 92% of Traded Goods
Eliminating tariffs on 92% of traded goods opens a wide door of directions to profit and success to be had. When we say traded goods, we mainly mean consumer-related products like appliances as well as electronics. While the RCEP does not cut tariffs as steep as the trans-pacific partnership, many researchers and analysts have discovered that the sheer size of the RCEP trade bloc makes it more significant than the TPP. This is evident in the 26.2 trillion dollar GDP that the RCEP accounts for between all of the member nations combined. While China already maintains a large number of free trade agreements with many nations around the world, the RCEP brings everyone together under one simple unified rulebook that can be adhered to on a global level.
Simplified Custom Procedures
Resellers of Chinese wholesale Goods understand how complicated customs procedures can truly be. Well, if you belong to one of the RCP member nations, you can look forward to simplified customs procedures that don't get in the way of your bottom line, not only simplified but cost-effective. This agreement also makes it accessible for both large and small enterprises to compete on a global level. This is good news for international retailers of wholesale Chinese merchandise. For example, a retailer of wholesale Chinese goods in Australia can now have a faster turnaround time between shipping Chinese goods from mainland China directly to their storefront or Warehouse in Australia. While the two Nations of Australia and China have always had bilateral free trade agreements, the RCEP takes a simplified approach that further opens up much of the Asia-pacific region.
Enhanced Focus & Support on Online Consumer Spending
For the first time ever, the RCEP is a trade agreement that focuses on enhancing online consumer spending. This is being made a reality by addressing e-commerce in the actual literature, and documentation of the RCEP. A country like China being able to eCommerce its products to other nations like New Zealand and vice versa is critical. That flexibility of eCommerce gives member nations the opportunity to simplify the supply chain, cut down on costly logistics expenses, and retail directly to consumers of neighboring nations, something that has been a challenge in the past. Enhancing this capability around the overall Asia-pacific region in areas where previously no agreement existed opens the door for tremendous eCommerce activity to take place.
Gives Chinese Wholesale Goods Unprecedented Access To International Markets
Chinese wholesale manufacturers and suppliers have always had access to markets around the globe. However, the RCEP now makes it even easier for individuals looking to purchase wholesale Chinese goods and merchandise directly from the source. Everything from consumer products to electronics can now be easily moved around member nations with minimal expense. While China does not belong to the trans-pacific partnership, and the United States of America does not belong to the RCEP, member nations can always move wholesale Chinese goods around the world through partnering nations. This is one of the reasons why India has decided to pull out of the RCEP.
How Will The RCEP Impact The Asia-Pacific Region
Now let's discuss how the RCEP will impact the Asian-pacific region as a whole. Many people wonder how the RCEP will impact the global economy over time. How will the RCEP impact small and local business owners retailing Chinese merchandise in international markets? These are popular questions being asked by researchers everywhere.
Opening of eCommerce Markets
The most important area that will be impacted by the RCEP in the Asia-pacific region is eCommerce Markets. Due to the fluidity and ease of movement that the RCEP gives, eCommerce in the Asian-pacific region has a huge potential for growth. Thanks to the RCEP, specific subjects like intellectual property rights, customs procedures, and labor rights will impact how products are priced in a way that is affordable for consumers around the globe. Due to the level of collaboration and diligent intra-regional cooperation, the Asia-pacific region can expect to experience an eCommerce boom.
The Entire Asia-Pacific Region Will operate Under A Single Rule Book of Trade
Never before has the entire Asia-Pacific region operated under a single rule book of trade that defines how member states will behave. Previously, individual free trade agreements have dictated how individual nations may respond to each other. However, now the RCEP opens up the Asian-Pacific region under one simplified rule which dictates how goods will flow among nations. Compared to the way things have been done in the past, the Asian-Pacific region can expect to experience an enhanced flow of merchandise thanks to the new simplified rule book of trade
Enhanced Supply Chains and Connection Between International Firms
International firms specializing in the importing & exporting of goods around the Asian-Pacific region can expect to experience an enhanced supply chain. Thanks to the cooperation between member nations, merchandise under simplified customs procedures will now flow faster and more affordable than ever. For consumers, that means a faster supply chain. For manufacturers, that means increased revenues, and for government states as a whole, you can expect to see increased GDP.
Develops Intra-Regional Cooperation Among Member Nations
As we've seen in the past, intra-regional cooperation between member states always results in increased collaboration and cooperation in other areas as well. Even though the RCEP has a focus on free trade, this Open-Door communication will lead to increased collaboration in areas such as defense, security, manufacturing, construction, as well as the sharing of intellectual property among member states. While these are not expressly mentioned in the RCEP, history has shown us that if free trade agreements do anything, they open up doors of communication to which member nations can easily exchange ideas, culture, and other assets to help make life easier for citizens and the global population as a whole.
The RCEP Will Make It Easier For You To Purchase Wholesale Chinese Goods
All the facts point towards a world where purchasing and reselling wholesale Chinese merchandise becomes simpler than ever. Stay tuned for more updates as the RCEP rolls out among member nations. To find quality Chinese manufacturers and wholesalers, visit Made-In-China.com.