RCEP to grow e-commerce in Asia: Deputy Minister

The Regional Comprehensive Economic Partnership (RCEP) will help establish a large e-commerce space based on internationally accepted standards, says Deputy Minister of Industry and Trade Tran Quoc Khanh.

The framework, with the participation of big economies who are advanced in e-commerce, would facilitate widespread digital connection and digital transformation in Asia, Khanh stated at a webinar held by UK-based think tank Asia House and China’s Cheung Kong Graduate School of Business (CKGSB) on Wednesday.

The webinar, named "New Frameworks: RCEP’s Critical Role in Driving Asia’s Digital Economy", brought together governmental representatives, senior business leaders, economists and scholars across Asia Pacific to discuss how RCEP could play a critical role in driving the region’s digital economy.

RCEP is the largest free trade agreement in the world so far and the most comprehensive that ASEAN has ever signed. It is also the first between ASEAN and external partners with a standalone chapter on e-commerce.

"The agreement shows significant efforts by ASEAN and its partners in promoting e-commerce in the region. It provides detailed obligations in areas like paperless trading, protection of online consumers, protection of online personal information and electronic signatures, and other elements that help promote e-commerce in the region."

The growth of e-commerce - one of the components of a digital economy - in RCEP economies has been elevated by the Covid-19 pandemic. Total e-commerce revenue across ASEAN in 2021 increased by 62% year-on-year. Revenue from e-commerce in five ASEAN member states who are signatories to RCEP surged 15 percent, according to Khanh.

He recommended to maintain the current practice of not imposing customs duties on electronic transactions between countries and reducing barriers to paperless transactions, while ensuring national security and legitimate public policy objectives.

Additionally, it is crucial to establish a mechanism to address issues related to development among countries through consultation and dialogue, he emphasised.

Bringing together 15 signatories across Asia Pacific, RCEP includes enhanced provisions in areas like cross-border data flow, online consumer protection, and several aspects of digital trade. It has the potential to consolidate and deepen the digital trade environment for businesses and SMEs throughout Asia.

Vietnam, an export-driven economy, is expected to register an 11.4% export growth thanks to RCEP, according to the World Bank.

The trade pact, which took effect on January 1, 2022, is a free trade agreement among 15 Asia-Pacific nations, namely Australia, Brunei, Cambodia, China, Indonesia, Japan, South Korea, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, Thailand, and Vietnam.

The 15 member countries account for about 30% of the world’s population (2.2 billion people) and 30% of global GDP ($29.7 trillion), making it the largest trade bloc in history.

"The RCEP has the potential to lift 27 million additional people to middle-class status by 2035. It will also boost wages, with faster gains in sectors that employ larger shares of women. The aggregate effects mask a large variety of outcomes across countries, with Vietnam expected to register the highest trade and income gains,” the bank stated in a report released in early May.