On January 1, 2022, the Regional Comprehensive Economic Partnership Agreement (RCEP) took effect in six ASEAN countries—Brunei, Cambodia, Laos, Singapore, Thailand, and Vietnam—and four non-ASEAN countries—Australia, China, Japan, and New Zealand.
RCEP is the world’s largest mega Free Trade Agreement (FTA), covering a region that accounts for roughly 30% of global GDP, population, and trade, respectively, as of 2020. However, the most notable feature of the RCEP is the geoeconomic opportunities stemming from the substantial growth potential of the region. RCEP is the institutional integration of regional value chains (RVCs) composed of neighboring countries in a region that is driving the global economy. Moreover, the core members of RCEP-RVC are China, Japan, and Korea, advanced manufacturing powers and the world’s 2nd, 3rd, and 10th largest economies, in that order.
RCEP’s uniqueness, unprecedented in the history of economic integration, lies in the geopolitical risks of economic integration between strategic competitors; deep-rooted mutual mistrust harbored by neighboring countries resulting from multifarious conflicts, disputes, and power transitions.
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