A new cooperation mechanism under the Regional Comprehensive Economic Partnership (RCEP), the world’s biggest trade deal, would accelerate the progress of establishing the ASEAN Business Community by 2025, according to Prime Minister Nguyen Xuan Phuc.

Prime Minister Nguyen Xuan Phuc and Minister of Industry and Trade Tran Tuan Anh at the signing ceremony. Photo: Quang Hieu.

After eight years of negotiations, the RCEP signing would open up a new promising era of economic and trade cooperation for the ASEAN and its partners, stated Mr. Phuc at the virtual signing ceremony of the long-awaited RCEP among 15 member countries on November 15.

The ASEAN is set to become a dynamic and strong economic organization that continues to work with other partners for the shared prosperity, Mr. Phuc added.

According to Mr. Phuc, this outcome shows the great efforts of the ASEAN in making use of its central role to lay a foundation for a future cooperation, and this would bring about benefits for all countries in the region.

Overview of the signing ceremony.

A joint statement from leaders of all 15 countries participating in the RCEP stated that the deal is an “unprecedented mega regional trading arrangement that comprises a diverse mix of developed, developing and least developed economies of the region.”

With the participation of China, South Korea, Japan, Australia, New Zealand and 10 ASEAN countries, the RCEP would cover a market of 2.2 billion people, or almost 30% of the world's population, and a combined GDP of US$26.2 trillion or about 30% of global GDP, and accounts for nearly 28% of global trade (based on 2019 figures).

The deal, however, does not include India, which dropped out of the negotiation process in November 2019. The statement noted all RCEP members “highly value India’s role in the RCEP and reiterate that the RCEP remains open to India”.

The participation of India, given its strategic importance, would create deeper and expanded regional value chains, added the statement.

Overview of the signing ceremony.

RCEP to help ASEAN maintain sustainable trade development

According to Minister of Industry and Trade Tran Tuan Anh, with the RCEP in place, countries are committed to open their trade, service and investment markets to facilitate trade, in turn creating opportunities for the formation of new supply chains in the region.

Additionally, the RCEP is set to help Vietnam and ASEAN countries maintain sustainable trade growth despite growing global uncertainties and disruption of global supply chains.

Minister Anh said binding commitments under the RCEP in terms of policies in trade, investment, intellectual properties, e-commerce and dispute settlement are key steps in keeping a fair trade environment in the region.

According to Mr. Anh, the RCEP along with other free trade agreements that Vietnam is a part of, would continue to help the country become an attractive investment destination globally.

More importantly, by sealing the deal ASEAN has proven its leading role, which would shape the region’s future, he noted.

For Vietnamese enterprises to fully benefit from RCEP and other FTAs, Mr. Anh said in addition to consistent support from the government, the business community should stay active in studying requirements and commitments of Vietnam in these deals.

There should be a change in the mindset of local enterprises to consider competition as motivation to move forward, stated Mr. Anh.

The RCEP and other trade deals would only be advantage for those that are flexible enough to adapt to changes in the business environment as a result of the global integration process.