The Regional Comprehensive Economic Partnership (RCEP), is the world’s biggest trade deal consisting of 15 countries. The countries participating in this deal are Australia, Brunei Darussalam, Cambodia, China, Japan, Indonesia, South Korea, Malaysia, Myanmar, Laos, New Zealand, Singapore, Thailand, Vietnam, and the Philippines. The deal inclusively consists of countries belonging to the Asia-Pacific region. This is known as the world’s biggest trade deal, as all the countries account for 31% of global GDP.
The member countries involved in the deal will get to talk about the supply and demand of several commodities, improving supply chain management of Asia-Pacific regions. While this is not it, the Singapore minister added that it will significantly improve customs processes and shipment clearances by simplifying them with other provisions consisting in the agreement.
Pandemic Drove The Need
The world’s biggest multilateral trade deal has its own origin, which dates back to 2020, the beginning of the pandemic. Since COVID-19 restrictions put a halt to global trade and put obstacles between countries trading with each other in sharing the resources, many industries were shutting down. With the lift of the restrictions and lockdown imposed by the authorities, demand revamped all over the world for many commodities, consisting mainly of metals.
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Below, represented global trade data provides insight into the imports of iron and steel by the top countries for the year 2020. The highest imports for 2020 is accounted by China with an import value of $36.8 billion, followed by Germany with an import value of $21.73 billion, the USA with a value of $18.79 billion, Turkey with a value of $15.10 billion, and Italy with a value of $14.89 billion. International trade statistics given below provide a more thorough analysis.
The sudden surge in the demand for revamping the industrial processes has brought a significant level of disturbance among the manufacturing units in several countries. On the other hand, the logistics companies are also facing issues with managing the distribution. After the pandemic, the manufacturing and distribution both have suffered drastically, resulting in further depletion of resources and distribution in supply chains between countries.
The agreement will bring more vitality to the logistics sector and distribution processes in Asia-Pacific regions while making supply chains generally more sturdy by increasing the participation of the pivotal countries. RCEP also thrives to eliminate tariffs on 91% of goods, while also encouraging free trade through investment and intellectual property.
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The top APEC importing countries are shown below with their quarterly imports, spanning the period from the third quarter of 2020 to the third quarter of 2021. The global trade statistics below provides a visual representation of the Asia-Pacific region trade trends and fluctuations. Look at the below representative figures with their respective countries to evaluate the data.
While the RCEP is solely responsible for managing and implementing the trade practices for Asia-Pacific regions, it will serve as a benchmark for many other countries to follow and grow. According to our trade data analysts, big economies such as the US and India could be participating in the development of the supply chain and logistics practices.