The Regional Comprehensive Economic Partnership (RCEP) is New Zealand‘s most recent free trade agreement in force.
It was signed on November 15, 2020 by New Zealand and 14 other Indo-Pacific countries (Australia, China, Republic of Korea, Japan and 10 ASEAN member states).
The Agreement entered into force on January 1, 2022 after the ratification of six of its members and, once it is fully in force, it will be considered the largest free trade area negotiated to date if the gross domestic product is taken as a reference (GDP) (which represented 29% of world GDP in 2020).
The RCEP covers trade in goods and services and investment. The paragraphs below describe some of New Zealand’s commitments within the framework of this trade agreement, according to information from the World Trade Organization (WTO).
In merchandise trade, the improvement in market access conditions under RCEP will be limited, given that New Zealand already has FTAs (in some cases more than one) with all RCEP parties, and those FTAs will continue to apply in parallel.
However, the RCEP is expected to bring additional benefits compared to existing FTAs in other areas, particularly in terms of lowering non-tariff barriers.
For example, the Agreement provides for a common set of rules of origin and common rules in relation to certain customs procedures, which will greatly facilitate the movement of goods between its parties.
Under RCEP, New Zealand will complete the implementation of its tariff liberalization schedule by 2041, with 92% of its tariff lines going duty-free by 2036, after which only tariff reductions will take place.
RCEP
For all other parties, the proportion of tariff lines that will be duty-free under the Agreement ranges from 81% (in the case of Japan for imports from the Republic of Korea) to 100% (Singapore).
The transition periods for the application will also vary according to the parties, and range from immediate application to a maximum period of 36 years counted from the entry into force of the Agreement.
The RCEP will extend some of New Zealand’s commitments under existing FTAs in services and, in particular, investment, given that investment coverage in some of New Zealand’s existing FTAs Zealand and RCEP parties is limited, as is the case with FTAs with ASEAN countries that are not parties to the CPTPP.
The RCEP also contains provisions on TBT, SPS, trade remedy measures, intellectual property, electronic commerce, competition policy, SMEs, government procurement, and economic and technical cooperation.
It provides for a State-to-State dispute settlement mechanism and consideration for the inclusion of another for investor-to-State dispute settlement within five years of the Agreement’s entry into force.
