Comprehensive Regional Economic Partnership: What is the impact on Europe and France?

Regional Comprehensive Economic Partnership (Regional Comprehensive Economic Partnership – (RCEP)) represents the world’s largest trade agreement. This agreement came into effect on January 1, 2022. The agreement was signed by 15 of the 10 member states of China, Japan, South Korea, Australia, New Zealand and the Association of Southeast Asian Nations (ASEAN).[1]..

This agreement is unprecedented in terms of both the size of the area it covers and its economic weight. The 15 member states make up about 30% of the world’s population (2.2 billion people), 30% of the world’s GDP and 28% of the world’s trade, making it the largest free trade area. For comparison, the United States-Mexico-Canada Trade Agreement (USMCA) represents 15% of the world’s GDP, 7% of the world’s population, and covers 15% of trade.[2] By RCEP, “Make the economies of North and Southeast Asia more efficient by combining the strengths of technology, manufacturing, agriculture and natural resources“”[3].. The economic impact is considerable. surely, Brookings Institution We estimate that the transaction could generate $ 500 billion by 2030.

The area of ​​RCEP countries accounts for half of the world’s manufacturing output. Exports from China, South Korea and Japan alone account for more than 85% of the exported products. This agreement will facilitate the expansion of production due to the benefits of high-tech products and the disadvantages of agricultural products.

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The RCEP brings together countries that already trade extensively with each other. According to CEPII “” The majority of signatories engage in more than half (often 60% or more) of foreign trade with RCEP member countries.[4] “.

Moreover, the profile of China’s exports to RCEP member countries is close to the profile of China’s exports to the European Union. As non-tariff barriers (such as carbon taxes at borders) increase, barriers to access to European markets will continue to increase.

Fifteen years ago, China refocused on the domestic market through consumption and the development of the middle class. This strategy now involves expanding regional integration by facilitating access to markets in East Asian countries in order to increase independence from European and American markets... Tomorrow, if Europe and the United States severely restrict access to the market, China will have a very strong economic growth alternative trading region. Block logic is turned on.

The RCEP agreement could also have a positive impact on European and French companies operating in the region. Harmonizing trade rules facilitates supply chain management and creates a more stable environment for exchanges between companies. Thus, this agreement is a real challenge for Europe and calls for a redefinition of trade relations with Asian countries.

Anne-Sophie Alsif, Chief Economist at BDO France and Anja Zekic.

[1] Vietnam, Malaysia, Singapore, Brunei, Indonesia, Philippines, Thailand, Laos, Myanmar, Cambodia.

[2] Regional Comprehensive Economic Partnership (RCEP), Overview of the European Parliament 2021.



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