Biggest Free Trade Agreement

It took eight years for the negotiations to take place, but on November 15, the world`s largest free trade agreement finally crossed the border. Cue a fight to digest the impact, for fashion and textile as much as any other sector. The RCEP is a proposed free trade agreement between the ten Asean member states and six dialogue partners: China, Japan, South Korea, India, Australia and New Zealand. The agreement will enter into force when six Asean countries and three dialogue partners ratify the agreement. A sensitive issue in multilateral trade agreements such as this is related to rules of origin (ROO), which determine the amount of local content entering a product in order to qualify it as duty-free entry into a Member State. Fifteen nations in the Asia-Pacific region have concluded the world`s largest free trade agreement, which they hope will accelerate the recovery of their economies devastated by the coronavirus pandemic. He said the signing of the RCEP agreement demonstrates the determination of participating countries to support free trade and investment, create jobs and strengthen the region`s supply and production chains. Other changes include new flexibility for trade in services across the region, including telecommunications services, professional and financial services; Improved mechanisms to remove non-tariff barriers to trade, including in areas such as customs procedures, quarantine and technical standards; Greater investment security for businesses new e-commerce rules to make it easier for businesses to trade online; A common set of intellectual property rules; and agreed rules of origin to increase the competitiveness of signatory markets within regional production chains. The RCEP signatories have decided to phase out tariffs and tariffs, while some will be abolished as soon as the agreement comes into force.

“Ratification is likely to be difficult in national parliaments, both because of anti-commercial and anti-Chinese sentiment,” he added. Clothes manufactured through an integrated supply chain subject to zero tariffs under the RCEP roof will also be more competitive in terms of price. Lu estimates that RCEP members` clothing exports to the United States and Europe will increase as soon as the agreement is implemented. Lu predicts that non-agreed apparel suppliers, such as Bangladesh, could see their market share decline, ranging from a 0.5% decline to the United States to 3% to South Korea.

Comments are closed.