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  jata  Malaysia's Free Trade Agreements

 
RCEP

RCEP Infographic

BACKGROUND

  • The RCEP negotiations was launched in November 2012 at the 21st ASEAN Summit in Phnom Penh, Cambodia but the negotiations only formally started in 2013.

  • Initially, RCEP was negotiated by 16 countries, consisting 10 ASEAN Member States (AMS) and ASEAN’s Free Trade Area (FTA) Partners or better known as AFPs. The AFPS are Australia, China, India, Japan, Korea as well as New Zealand.

  • Later in November 2019, during the ASEAN Summit, Prime Minister of India, Mr Narendra Modi announced that India cannot join RCEP in its current form.

  • In gist, the objective of RCEP is to streamline and amalgamate the ASEAN FTAs with its Dialogue Partners (ASEAN + 1 FTAs) into a single regional trade agreement that can contribute to strengthening regional value chain actives in the region as well make RCEP more user-friendly and simpler to use especially for the Small and Medium Enterprises (SMEs).

  • The ASEAN + 1 FTAs are:

    1. ASEAN-China FTA

    2. ASEAN-Australia New Zealand FTA

    3. ASEAN-India FTA

    4. ASEAN-Japan FTA

    5. ASEAN-Korea FTA

  • When the RCEP Agreement is implemented, it will cover: 

    1. Tariff elimination and reduction for merchandise goods, including the facilitation of export and import of goods among the RCEP countries.

    2. Opening markets to welcome the services providers within the RCEP region for sectors, including financial services, telecommunications services and movement of natural persons;

    3. Promotion, facilitation and protection on investment within the region;

    4. To ensure a level playing field to ASEAN countries while recognising the importance of special and differential treatment among RCEP countries especially the developing countries; and

    5. information exchange and promotion of transparency measures to facilitate business and investment within the region including providing economic and technical cooperation especially to SMEs .

SCOPE

The scope of the RCEP negotiating areas is comprehensive and include the following: 

  1. Tariff elimination for trade in goods, including the related chapters of rules or origin, customs procedures, sanitary and phytosanitary measures, standards, technical regulations and conformity assessment procedures and trade remedies;

  2. Liberalisation of services sectors, including financial services, telecommunications services and movement of natural persons;

  3. Promotion, facilitation, protection and liberalisation of investment;

  4. Competition policy (countries are allowed to implement national laws related to state-owned enterprises), intellectual property rights, electronic commerce and government procurement (no market access, only for information exchange and promotion of transparency measures),

  5. Economic and technical cooperation and SMEs; and

  6. Legal and institutional issues.

BENEFITS TO MALAYSIA

  • The major beneficiary of this mega FTA will be ASEAN. Based on World Bank data in 2018, the 15 RCEP Participating Countries (RPCs) account for:

    • A total of 29.7% of the global population or 2.2 billion people,

    • Combined Gross Domestic Products (GDP) of US$24.8 trillion or 28.9% of the world’s GDP.

    • Accounts for US$10.7 trillion or 27% of global merchandise trade.

    • The five AFPs are major investors in ASEAN contributing US$42.3 billion (27.7%) of the total Foreign Direct Investment (FDI) flow of US$153.1 billion.

  • RCEP will benefit towards Malaysian companies by:

    • Offering market access to a third of world’s population where intra-regional sourcing of raw materials at competitive price,

    • Integrating supply chain within the RCEP region,

    • Promoting greater transparency, information sharing, trade facilitation, economic cooperation, standardisation of international rules relating to E-commerce,

    • Mutually recognising international standards, technical regulations trade, and

    • Providing clarity in protection of intellectual property rights.

SUMMARY OF THE RCEP AGREEMENT

Larger view

RELATED DOCUMENTS

  Legal Text of the RCEP Agreement

Market Access Annexes Annex I - Schedules of Tariff Commitments


Annex II – Schedules of Specific Commitments for Services


Annex III – Schedules of Reservations and Non-Conforming Measures for Services and Investment

  Annex IV – Schedules of Specific Commitments on Temporary Movement of Natural Persons

CONTACT US

  • For enquiries, please contact the FTA focal point(s) as follows:

Mr Fahrulrazy Othman
DL: 03-6200 0400
Email: fahrulrazy@miti.gov.my

MIDA MATRADE MPC MIDF MAI MSI SIRIM Berhad MIMOS Berhad Exim Bank Department of Standards Malaysia (JSM) InvestKL My Gov