Markets
RCEP Explained: The World’s Biggest Trading Bloc Will Soon be in Asia-Pacific
RCEP Explained: The World’s Biggest Trading Bloc
Trade and commerce are the lifeblood of the global economy. Naturally, agreements among nations in a certain geographical area help facilitate relationships in ways that are ideally beneficial for everyone involved.
In late 2020, the Regional Comprehensive Economic Partnership (RCEP) was signed, officially creating the biggest trade bloc in history. Here, we break down everything you need to know about it, from who’s involved to its implications.
Who’s in the RCEP, and Why Was it Created?
The RCEP is a free trade agreement between 15 nations in the Asia-Pacific region, and has been formalized after 28 rounds of discussion over eight years.
Member nations who are a part of the RCEP will benefit from lowered or completely eliminated tariffs on imported goods and services within the region in the next 20 years. Here are the countries which have signed on to be member nations:
Country | Population (M) | Nominal GDP ($B) |
---|---|---|
🇦🇺 Australia | 25.7 | $1,359 |
🇧🇳 Brunei | 0.5 | $12 |
🇰🇭 Cambodia | 15.7 | $26 |
🇨🇳 China | 1404 | $14,723 |
🇮🇩 Indonesia | 270.2 | $1,060 |
🇯🇵 Japan | 125.8 | $5,049 |
🇰🇷 South Korea | 51.8 | $1,631 |
🇱🇦 Laos | 7.3 | $19 |
🇲🇾 Malaysia | 32.9 | $338 |
🇲🇲 Myanmar | 53.2 | $81 |
🇳🇿 New Zealand | 5.1 | $209 |
🇵🇭 Philippines | 108.8 | $362 |
🇸🇬 Singapore | 5.8 | $340 |
🇹🇭 Thailand | 69.8 | $502 |
🇻🇳 Vietnam | 97.4 | $341 |
RCEP Total | 2,274.2M | $26,052B |
Source: IMF
But there is still some work to do to bring the trade agreement into full effect.
Signing the agreement, the step taken in late 2020, is simply an initial show of support for the trade agreement, but now it needs to be ratified. That means these nations still have to give their consent to be legally bound to the terms within the RCEP. Once the RCEP is ratified by three-fifths of its signatories—a minimum of six ASEAN nations and three non-ASEAN nations—it will go ahead within 60 days.
So far, it’s been ratified by China, Japan, Thailand, and Singapore as of April 30, 2021. At its current pace, the RCEP is set to come into effect in early 2022 as all member nations have agreed to complete the ratification process within the year.
Interestingly, in the midst of negotiations in 2019, India pulled out of the agreement. This came after potential concerns about the trade bloc’s impacts on its industrial and agricultural sectors that affect the “lives and livelihoods of all Indians”. India retains the option to rejoin the RCEP in the future, if things change.
The Biggest Trading Blocs, Compared
When we say the Regional Comprehensive Economic Partnership is the biggest trade bloc in history, this statement is not hyperbole.
The RCEP will not only surpass existing Asia-Pacific trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in size and scope, but also other key regional partnerships in advanced economies.
This includes the European Union and the U.S.-Mexico-Canada Agreement (USMCA, formerly known as NAFTA). How does the trio stack up?
Nominal GDP, 2020 | Population, 2020 | |
---|---|---|
EU | $15.2 trillion | 445 million |
USMCA | $23.7 trillion | 496 million |
RCEP | $26.1 trillion | 2.27 billion |
World | $84.5 trillion | 7.64 billion |
With the combined might of its 15 signatories, the RCEP accounts for approximately 30% of global GDP and population. Interestingly, the total population covered within the RCEP is near or over five times that of the other trade blocs.
Another regional agreement not covered here is the African Continental Free Trade Area (AfCFTA), which is now the largest in terms of participating countries (55 in total), but in the other metrics, the RCEP still emerges superior.
Implications of the Regional Comprehensive Economic Partnership
The potential effects of the RCEP are widespread. Among others, the agreement will establish rules for the region around:
- Investment
- Competition
- E-commerce
- Intellectual property
- Telecommunications
However, there are some key exclusions that have raised critics’ eyebrows. These are:
- Labor union provisions
- Environmental protection
- Government subsidies
The RCEP could also help China gain even more ground in its economic race against the U.S. towards becoming a global superpower.
Last, but most importantly, Brookings estimates that the potential gains from the RCEP are in the high billions: $209 billion could be added annually to world incomes, and $500 billion may be added to world trade by 2030.
Markets
The Best U.S. Companies to Work for According to LinkedIn
We visualized the results of a LinkedIn study on the best U.S. companies to work for in 2024.
The Best U.S. Companies to Work for According to LinkedIn
This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.
In this graphic, we list the 15 best U.S. companies to work for in 2024, according to LinkedIn data.
LinkedIn ranked companies based on eight pillars: ability to advance, skills growth, company stability, external opportunity, company affinity, gender diversity, educational background, and employee presence in the country.
To be eligible, companies must have had 5,000 or more global employees, with at least 500 in the country as of December 31, 2023.
Data and Highlights
Financial institutions dominate the ranking of the best U.S. companies to work for in 2024, with JP Morgan Chase & Co. ranking first.
Rank | Company | Industry |
---|---|---|
1 | JP Morgan Chase & Co. | Financial Services |
2 | Amazon | E-commerce |
3 | Wells Fargo | Financial Services |
4 | Deloitte | Professional Services |
5 | PwC | Professional Services |
6 | UnitedHealth Group | Healthcare |
7 | AT&T | Telecommunications |
8 | Verizon | Telecommunications |
9 | Moderna | Pharmaceuticals |
10 | Alphabet Inc. | Technology |
11 | General Motors | Automotive |
12 | Bank of America | Financial Services |
13 | Mastercard | Financial Services |
14 | Capital One | Financial Services |
15 | Northrop Grumman | Aerospace & Defense |
J.P. Morgan has a program that offers opportunities for candidates without a university degree. In fact, in 2022, 75% of job descriptions at the bank for experienced hires did not require a college degree.
Meanwhile, Deloitte and Amazon offer a variety of free training courses, including in AI.
Moderna includes in its employee package benefits to help avoid employee burnout — from subsidized commuter expenses and pop-up daycare centers, to wellness coaches.
Mastercard offers flexible work availability, with 11.5% remote and 89% hybrid options.
It’s also interesting to note that only Amazon and Alphabet made the cut from the ‘Magnificent Seven’ companies (Apple, Microsoft, Google parent Alphabet, Amazon, Nvidia, Meta Platforms, and Tesla).
See more about the best companies to work for in this infographic, which covers a separate ranking from Glassdoor.
-
Technology6 days ago
Visualizing AI Patents by Country
-
Green2 weeks ago
Ranking the Top 15 Countries by Carbon Tax Revenue
-
Markets2 weeks ago
U.S. Debt Interest Payments Reach $1 Trillion
-
Mining2 weeks ago
Gold vs. S&P 500: Which Has Grown More Over Five Years?
-
Uranium2 weeks ago
The World’s Biggest Nuclear Energy Producers
-
Misc2 weeks ago
How Hard Is It to Get Into an Ivy League School?
-
Debt2 weeks ago
How Debt-to-GDP Ratios Have Changed Since 2000
-
Culture2 weeks ago
The Highest Earning Athletes in Seven Professional Sports