Page 10 - Building a Treasury Centre for Sustainable Growth

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
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.

8 Building a Treasury Centre for Sustainable Growth