Page 10 - Building a Treasury Centre for Sustainable Growth
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Regional Comprehensive Economic

                        Partnership (RCEP)

                        After eight years of negotiation, the Regional Comprehensive Economic Partnership (RCEP) free
                        trade agreement (FTA) that involves all 10 ASEAN member countries, Mainland China, Japan,
                        South Korea, Australia and New Zealand was signed in November 2020. The RCEP is the world’s
                        largest FTA, covering 30 per cent of the global GDP and world’s population, and 27 per cent of the
                        world’s total trade value in 2019. Furthermore, RCEP members produced nearly half of the world’s
                        manufacturing output.

                                Eliminates tariffs of      Single, unified set of      Simplified customs
                               92% of goods traded            rules of origin              procedures

                        The RCEP not only lowers tariffs but also, more importantly, harmonises the “rules of origin”
                        among the 15 participating countries. This would enhance the region’s competitiveness as a
                        location for supply chains. With the ability to offer investors a broad array of production locations
                        with differing comparative advantages, and the opportunity to export at preferential tariff rates to
                        a wide economic area comprising both high-income consumers and a large and growing middle-
                        income segment, investments into ASEAN countries is expected to increase. This would deepen
                        cross-border production linkages and increase regional flow of intermediate products. This would
                        in turn drive a greater need for a RTC to manage the increased investments and currency flow in
                        ASEAN countries.

                                          Singapore is the first RCEP participating country to complete the
                                          official ratification process, signaling the nation’s strong commitment
                                          to strengthen trade and economic connectivity with its partners. As
                                          a key FTA, the RCEP will complement Singapore’s existing network
                                          of FTAs, and provide businesses with more opportunities and
                                          preferential access into growing markets in the region.

                                          Hong Kong SAR
                                          Hong Kong SAR has maintained tight economic relationship with
                                          RCEP members over the years, particularly with Mainland China and
                                          ASEAN countries. It has signed FTAs with 13 members (Mainland
                                          China, 10 ASEAN countries, Australia and New Zealand) of the RCEP.
                                          Hong Kong SAR has expressed strong interest in joining the RCEP as
                                          early as possible.

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