RCEP boosts trade, business growth for member countries

Businesses in member countries of the Regional Comprehensive Economic Partnership (RCEP) are reaping the rewards of reduced trade barriers, preferential tariffs, and expanded market access, leading to increased economic cooperation and growth.

RCEP is a free trade agreement initiated by the Association of Southeast Asian Nations (ASEAN) in 2012 and comprises 15 members -- China, Japan, South Korea, Australia, New Zealand and the 10 ASEAN countries.

Entering into force on Jan 1, 2022, RCEP is the world's largest free trade pact in terms of population and trade volume. Over 90 percent of goods traded within the region will eventually enjoy zero tariffs.

A report by consulting firm Deloitte showed that the overall transaction volume of micro-multinational companies in RCEP countries and regions surged by 190 percent year on year in the first half of 2024.

"We see quite a fair bit of increasing, especially with our cross-border declaration services. In terms of the service, declaration itself is much simpler and easier. One of the very important business that we are looking at is the import of records. With RCEP, we actually see net new revenue growth of 10 percent to 15 percent from this area," said Ng Chee Keong, vice-president of North-East, Central and Southeast Asia of Crimson Logic.

He added that RCEP's measures, such as gradually eliminating tariffs on 90 percent of goods, and expanding the opening of services trade, have reduced trade barriers between member countries.

"First, we have a big conglomerate of high-tech companies in China that is working with us now. They are very interested in bringing their products into ASEAN countries. We have helped them to leverage on the RCEP framework, so that they can reduce in terms of tax and make the whole trade itself much easier," said Ng.

Kim Samsoo, director of the Dalian South Korea Trade Center under the South Korea Trade-Investment Promotion Agency, echoed this sentiment, saying that preferential tariffs help enterprises save costs and gain technological and market development benefits.

"Through preferential tariffs among South Korea, China, Japan, Southeast Asia, Australia, New Zealand and other RCEP member countries, enterprises can not only save costs, but also get more benefits in terms of technology and market development," said Kim.

A survey by the Chinese Academy of International Trade and Economic Cooperation and the Ministry of Commerce found that over three-quarters of nearly 2,300 Chinese companies reported an improved business environment, and more than half acknowledged the positive impact of RCEP on their operations.

As the largest economy in the RCEP region, China accounts for 60 percent of the region's GDP, 49 percent of exports and 42 percent of imports. The country also represents 36 percent of foreign investment and 25 percent of outbound investment in the region.

In 2022 and 2023, China's trade with RCEP members accounted for over 30 percent of China's total foreign trade.

According to the Foreign Ministry, in the first three quarters of 2024, China's trade with other RCEP members reached 9.63 trillion yuan (about 1.33 trillion U.S. dollars), a year-on-year increase of 4.5 percent.

In 2023, China's non-financial direct investment in RCEP countries surged 26 percent year on year, surpassing the global investment growth rate by 14 percentage points.

The International Monetary Fund (IMF) predicted that from 2023 to 2029, the GDP of the RCEP region will grow by 10.9 trillion U.S. dollars, which is 1.4 times the expected GDP growth of the U.S. and 2.6 times that of the EU during the same period.

RCEP boosts trade, business growth for member countries

The long-term economic sanctions imposed by the United States on Venezuela have hindered the Latin American country's development gravely despite its abundant crude oil resources, a Venezuelan expert said recently.

Venezuela holds the world's largest proven oil reserves. According to a poll on December 2 by a Venezuelan research institute, 90 percent of respondents believe the true purpose behind recent U.S. threats is to overthrow the government of Venezuelan President Nicolas Maduro and seize the country oil resources.

According to the U.S. Energy Information Administration, Venezuela's oil reserves stand at 303 billion barrels, approximately one-fifth of the world's total crude oil reserves and the largest known single deposit globally.

Currently, Venezuela's daily crude oil production hovers around 1 million barrels.

Despite the rich natural resources, Venezuela's GDP ranks in the lower-middle tier among the South American nations, a result from years of heavy U.S. economic sanctions.

"The scope of U.S. sanctions is extremely broad. They prohibit free trade, prevent the free exchange of technologies, and restrict the free flow of currencies, all of which are crucial for any nation's development. Furthermore, persistent military and psychological threats from the United States have hindered the national development and deterred international investment in Venezuela. Compounded by the U.S. government's forced border closures, foreign capital faces numerous barriers to enter Venezuela," Ramiro Royero, a professor at the School of Petroleum Engineering of Central University of Venezuela, said in a recent interview with the China Central Television (CCTV) . Royero said that while the United States is an oil-producing nation itself, it maintains high demand for Venezuelan crude. This stems from Venezuela's supply of heavy crude oil, which the United States lacks, creating strong market complementarity.

Royero said that due to insufficient domestic heavy crude oil production, the U.S. refineries rely heavily on imports to efficiently produce heavy diesel, marine fuel oil, lubricants, and asphalt.

Venezuela's production costs are lower due to different production methods, with some projects costing less than 20 U.S. dollars per barrel, far below U.S. production costs.

Royero said Venezuela is a sovereign country and is able to solve its own problems without foreign intervention.

"Despite sanctions, threats, and the current woes, Venezuela maintains daily crude exports of approximately 200,000 barrels, accounting for about 27 percent of U.S. crude imports from South America. This positions Venezuelan as a vital global crude supplier of refined products, particularly for that of the United States. The purpose of U.S. military actions is twofold: geopolitical control and economic dominance over Latin America's raw materials. However, Venezuela is a sovereign country which will resolve its domestic problems independently and advance steadily without external interference," said Royero.

US long-term sanctions shackle Venezuela's development: expert