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China joins the world's largest free trade zone! Over 90% of goods or zero tariffs affect 1/3 of the world’s population and 15 countries!

After 8 years of marathon negotiations, the free trade zone with the largest population, the most diverse membership structure and the greatest development potential in the world ushered in an important milestone on November 15.

According to Xinhua News Agency, 15 member states of the Regional Comprehensive Economic Partnership Agreement (RCEP) formally signed the agreement on November 15. The signing ceremony was conducted by video.

RCEP was originally initiated by the ten ASEAN countries in 2012, inviting China, Japan, South Korea, Australia, New Zealand, and India to participate ("10+6") to establish a free trade agreement with a unified market for 16 countries by reducing tariffs and non-tariff barriers .

RCEP covers about 2.2 billion people, and the total GDP will reach 23 trillion US dollars, accounting for 1/3 of the global total.

In November last year, India decided to withdraw from negotiations due to differences in tariffs, trade deficits with other countries and non-tariff barriers.

Although RCEP participating countries plan not to accept new members for a certain period of time, India is treated as an exception to improve the environment in which India can return after requesting.
RCEP negotiations were officially launched in November 2012, involving more than ten fields including small and medium-sized enterprises, investment, economic and technical cooperation, trade in goods and services.

After 3 leaders' meetings, 19 ministerial meetings, and 28 rounds of formal negotiations, in 2019, RCEP negotiations have made significant progress. On November 4 of that year, the third RCEP leaders’ meeting was held in Bangkok, Thailand and issued a joint statement, announcing that the 15 member states have concluded all text negotiations and substantially all market access negotiations, and will start the review of legal texts so that in 2020 Signed the agreement in 2015. India has not joined the agreement for the time being due to "an important issue has not been resolved."
RCEP negotiations are based on the previous "10+3" cooperation and further expand the scope to "10+5". Prior to this, China has established a free trade area with the ten ASEAN countries. The zero tariff of the China-ASEAN Free Trade Area has covered more than 90% of the tax items of both parties.

According to China Times, Zhu Yin, associate professor of the Department of Public Administration of the School of International Relations, said, “RCEP negotiations will undoubtedly take greater steps in reducing tariff barriers. In the future, 95% or more of the tax items will not be excluded from being included in the scope of zero tariffs. There is also market space. It will be even bigger, which is a major policy benefit for foreign trade companies."
Statistics show that in the first three quarters of this year, China-ASEAN trade volume reached US$481.81 billion, an increase of 5% year-on-year. ASEAN has historically become China's largest trading partner, and China's investment in ASEAN increased by 76.6% year-on-year. In addition, the conclusion of the agreement will also help build the supply chain and value chain in the region. Wang Shouwen, Deputy Minister of Commerce and Deputy Representative of International Trade Negotiations, once pointed out that the formation of a unified free trade zone in the region will help the local region to form a supply chain and value chain based on its comparative advantages, and it will affect the flow of goods and technology in the region. , Service flows, capital flows, including cross-border movement of people, will have great benefits, forming a "trade creation" effect.
Take the clothing industry as an example. If Vietnam’s garments are now exported to China, it will have to pay tariffs. If it joins the free trade agreement, the regional value chain will come into play. China imports wool from Australia and New Zealand. Because it has signed free trade agreements, it may import wool duty-free in the future. After importing, it will be woven into fabrics in China. This fabric may be exported to Vietnam. South Korea, Japan, China and other countries, these may be tax-free, which will promote the development of the local textile and garment industry, solve employment, is also very good for exports.

In fact, all enterprises in the local area can participate in the value accumulation of the place of origin, which is of great benefit to promoting mutual trade and investment within the region.

Therefore, after the RCEP is signed, if more than 90% of the products gradually zero tariffs, it will greatly promote the economic vitality of more than a dozen members, including China.