Economic implications of rcep for the EU and Japan

Abstract

On 6 November 2020 the 15 negotiating parties of the Regional Comprehensive Economic Partnership (RCEP) signed the largest free-trade area (FTA) ever in terms of size ($26 trillion) and population (2.3 billion). It follows the Comprehensive and Progressive Agreement on Transpacific Partnership (CPTPP), which was signed in March 2018 and went into effect in December 2018, as the second ‘megaregional’ trade agreement in the Asia-Pacific region. These two agreements have the potential to mold regional trade and investment patterns well into the future and to influence the direction of global economic cooperation at a challenging time. In addition, they will no doubt expand in the coming years; the agreements are open to new membership with specific chapters on enlargement and each has potential members already in the queue. For example, the United Kingdom on 1 February 2021 formally expressed its intent to open negotiations to join the CPTPP, and Chinese President Xi at the APEC Summit in November 2020 noted that China is studying the possibility of applying as well. Hong Kong will likely be the first new member in line for RCEP.