Theoretical Understanding of the Specifics and Relevance of the RCEP Trade Agreement and Forging a New Path Based on the Digitalization of Trade and Investment in This Era. Will RCEP be the Road Map for the Future of World Trade?

Abstract

The recently signed Regional Comprehensive Economic Partnership (RCEP), considered of great significance, is not the first trade agreement signed by ASEAN member countries, or either any of their five (5) Free Trade Agreement (FTA) partners, China, Japan, New Zealand, Australia, and South Korea. But what makes this newly signed trade agreement between its participating countries unique and different from all other trade agreements signed in the past? Of interest, RCEP is currently the second major trade agreement with pronounced emphasis on Asia. Respectively, RCEP is now perceived as the world’s largest trade alliance, and is envisioned to facilitate economic trade integration in the Asian region. Correspondingly, the participating member countries have all agreed to reduce or completely eliminate tariff and non-tariff barriers on imports and exports within the free trade zone. Deciphered to be a milestone, RCEP is intended to link about thirty (30%) percent of the world’s population and output, which is expected will generate meaningful benefits.

Given the continued rapid development of digital technologies in this era, it is certainly unavoidable if companies want to move forward in the future. This, most likely is one reason, why RCEP members included a chapter in the trade agreement relating to e-commerce and trade. Without a doubt, the tremendous impact of technology on the way economic activities are conducted worldwide has been a catalyst, forcing companies to redirect their businesses, to lean more towards the inclusion of technology in every aspects of their daily operation.

Thus, as part of the continued development of digital technologies, it means the fifteen (15) Asia-Pacific members of RCEP has the added responsibility to play a vital role in facilitating the smooth integration of digital technology in this trade agreement, which clearly will be beneficial for all. Therefore, on what basis can this be made possible? On a whole, it is anticipated that the prospect of trade digitalization will reduce the cost of engaging in international trade and create opportunities for businesses and consumers regionally and globally. Today, many activities are increasingly conducted by way of digital technology. For example: Nowadays, people rely greatly on computers and mobile phones with internet to conduct research and purchase goods and services, in effect transforming the way we acquire and spread information, communicate, and conduct business in this twenty first (21^st) century.

Nonetheless, in what way and how can RCEP facilitate the digitalization of trade and investment in goods and services to make it advantageous to the region? Accordingly, within this context, this paper intends to explore the specifics and relevance of RCEP, and whether it is destined to be the roadmap for the future of reshaping world trade. Equally, how can trade digitalization facilitate the expansion of trade and investment in the Asia-Pacific region in this digital era?