RCEP to Boost Trade by $40B

The Regional Comprehensive Economic Partnership (RCEP) will increase trade volume by about $40 billion, potentially addressing economic issues caused by climate change, geopolitical conflicts, and trade disputes, Prime Minister Hun Sen said.
Prime Minister Hun Sen speaks at a graduation ceremony in Phnom Penh, October 11, 2022. Kiripost via SPM Page
Prime Minister Hun Sen speaks at a graduation ceremony in Phnom Penh, October 11, 2022. Kiripost via SPM Page

Regional Comprehensive Economic Partnership (RCEP) will boost trade volume by around $40 billion and increase real income by up to 2.5 percent, according to Prime Minister Hun Sen.

Climate change, regional geopolitical conflicts - particularly the Russia-Ukraine war - and other trade and tech disputes all have negative and incalculable consequences, causing difficulties and disruption to regional and global growth in the short- and medium-term, Prime Minister Hun Sen said today at the 10th Anniversary of the RCEP Agreement.

“In this context, RCEP is an important mechanism and approach that underlines our unwavering commitment to safeguarding the rules-based multilateral free trade system, maintaining economic openness, and upholding a spirit of cooperation,” he said.

The PM noted that RCEP has great potential to address major concerns, including strengthening global value chains, speeding digitalization, minimising the negative effects of climate change, and countering anti-globalization and protectionist trends.

He added that RCEP also plays an important role in sustaining regional prosperity and political stability by promoting key roles of strengthened economic integration, advancing the critical roles of greater economic integration, and expanding current institutional frameworks for establishing high-level conversations.

“The studies by major international institutions have shown that full implementation of RCEP will boost trade volume by approximately $40 billion, increase real income by up to 2.5 percent, increase trade activities amongst RCEP members by 12.3 percent,” the PM said.

“It also helps lift the livelihoods of an additional 27 million people into the middle class for the RCEP region by 2035, while RCEP is estimated to increase global incomes by up to $263 billion,” he added.

He said that Cambodia's GDP could rise by 2 percent to 3.8 percent, exports could increase by 9.4 percent to 18 percent, job opportunities would increase by 3.2 percent to 6.2 percent annually, and tax revenue could rise by 2 percent to 3.9 percent per year. Overall investment could rise by 23.4 percent, according to a study conducted by ERIA in early 2022.

“I would like to emphasise that despite being a less-developed country, Cambodia is a highly open economy that values a rules-based multilateralism system and regional and global economic integration, which is consistent with the RCEP Agreement's aims,” he said.

RCEP launched in 2012 during the 21st ASEAN Summit in Phnom Penh, of which Cambodia was the ASEAN Chair. It spent more than eight years in negotiations of until its desired objectives were achieved.

Cambodia saw the Bilateral Cambodia-China Free Trade Agreement enter into force on January 1, as well as the Cambodia-Korea Free Trade Agreement, which will enter into force on December 1.