What is the Regional Comprehensive Economic Partnership?
What is the Regional Comprehensive Economic Partnership? Those who follow the news and are involved in global business know the answer. It is a free trade agreement in the Asian-Pacific market. It was the first of its kind, the largest of its kind, and it was just enacted a couple of days ago. On November 15th, the countries got together, creating the largest economic trade zone in the world. It encompasses about 30% of the world’s population, as well as 30% of the world’s GDP. This means that this is the largest trade block ever. What does this mean for everyone else in practical terms? Whether you are in Europe or America, the consequences are significant.
First, standards defined in this market may have a direct impact on the standards in your country. This is with regards to consumer products, safety, or other measures. This is because global economies will make it in a way that what works in one country and one trade zone, will work in the other trade block. If you as a company are able to manufacture a product which meets a certain requirement, maybe we will just impose this standard out into other countries. Second, there could be a trend with how different developed markets go together. For example, NAFTA. The uniqueness of NAFTA was that two advanced countries as in the US and Canada teamed up with Mexico, which was not as developed at that time, and went into a treaty together.
Now, the Regional Comprehensive Economic Partnership has high income, middle income, and low-income countries all together within this deal. What this means is that the blueprint of this model could be copied by other countries and regions for a development idea, and to include rather than exclude countries which are in the development stage. My last takeaway is that when we do business, it is a fascination to look into the Asian markets. Do we see this as the beginning of the end of the European and American global trade? It could be because the largest trade block in the world is neither European nor American, it is Asian. Only time will tell but in the meantime, stay tuned because we will update you with any developments with regards to this treaty.
Register for our free webinar on November 24th where we talk about market entry into the United States for German companies! Click here to register.
You can also read more about the Regional Comprehensive Economic Partnership here.
Check out more of our blog here.