Guest Opinion: Three years on, RCEP testifies to power of economic integration for shared prosperity

by Thong Mengdavid

Three years on, the Regional Comprehensive Economic Partnership (RCEP), the world's largest free trade agreement by GDP, has become a testament to the power of economic integration, proving that cooperation, not isolation, leads to shared prosperity.

The mega-trade pact, which covers about 2.3 billion people, has demonstrated its transformative potential in bolstering regional economic growth, enhancing trade liberalization and fostering deeper integration among its members.

BOOST TO REGIONAL TRADE

The RCEP comprises 15 countries, including 10 countries of the Association of Southeast Asian Nations, as well as China, Japan, South Korea, Australia and New Zealand.

Its success lies in its focus on reducing trade barriers, harmonizing standards and creating a seamless economic zone.

Over the past three years, tariffs on more than 90 percent of goods traded among member countries have been gradually eliminated or significantly reduced, facilitating cost savings for businesses and consumers alike.

This tariff reduction has been a boon for small-and medium-sized enterprises, enabling them to access new markets with reduced regulatory hurdles.

Intra-regional trade has surged as businesses take advantage of streamlined customs procedures, simplified rules of origin and improved supply chain connectivity.

For example, Southeast Asian countries have witnessed a significant uptick in exports of agricultural products and electronics, while advanced economies like Japan and South Korea have expanded their high-tech goods and services to growing markets.

For Cambodia, according to the Ministry of Commerce's latest report, the kingdom exported 8.25 billion U.S. dollars worth of products to other RCEP member countries in the first 11 months of 2024, up 14.4 percent from 7.21 billion dollars over the same period in 2023.

CHINA'S KEY ROLE

As the largest economy in the RCEP, China has played a pivotal role in the agreement's success.

China's commitment to trade liberalization and open markets has set a strong foundation for the partnership.

Over the past three years, China has not only adhered to its commitments under the RCEP, but also actively promoted regional cooperation through investments in infrastructure and digital trade.

China's Belt and Road Initiative has complemented the goals of the RCEP by improving connectivity across Asia, allowing member states to capitalize on new trade routes and logistical networks.

Additionally, China's technological advancements in areas such as e-commerce have facilitated the digitalization of trade, enabling businesses within RCEP countries to expand their reach and efficiency.

The Chinese market has also provided a robust demand base for RCEP countries, driving exports of goods ranging from agricultural produce to high-value manufactured products.

Furthermore, China's proactive engagement in regional dialogue has helped resolve trade disputes and strengthened cooperation in intellectual property protection and sustainable development.

MODEL FOR MULTILATERALISM

In an era of rising protectionism and geopolitical uncertainties, the RCEP has emerged as a beacon of multilateral cooperation.

By prioritizing inclusivity and shared prosperity, the agreement has demonstrated the benefits of free trade and economic integration.

Its ability to bring together diverse economies, from developed nations to emerging markets, underscores the potential of collective efforts to overcome global challenges.

As the RCEP enters its fourth year, member states should continue working to maximize its benefits. This includes deepening collaboration in emerging areas such as green technology, the digital economy and sustainable development.

With China's continued firm support and the unwavering commitment of all members, the RCEP is well-positioned to drive regional growth and set a benchmark for global trade partnerships in the years to come.

Editor's note: Thong Mengdavid is a lecturer at the Institute for International Studies and Public Policy of the Royal University of Phnom Penh in Cambodia.

The views expressed in this article are those of the author and do not necessarily reflect those of Xinhua News Agency.