16/02/2021 Eastern Asia Markets: A sensible choice for European entrepreneurs
Philippe Deltombe, Partner Asian Desk. AGM Abogados
What do mega-regional free trade pacts, container routes volumes, and patent registration data have in common?
- The Regional Comprehensive Economic Partnership (RCEP) signed in 2020 by China, Japan, South Korea, Australia, New Zealand and ASEAN (Indonesia, Malaysia, Singapore, Brunei, Philippines, Vietnam, Laos, Cambodia, Thailand, Myanmar) is the world biggest free trade agreement. RCEP accounts for 30% of the world population (2.2 billion people) and 30% of the global GDP ($6.2 trillion).
In addition to eliminating 90% of tariffs, RCEP shall remove technical barriers to trade, streamline electronic commerce and intellectual property regulations while common provisions on the rule of origin shall facilitate trade within the region.
RCEP sort of take place at the side of CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership), which was signed in 2018 by Malaysia, Singapore, Brunei, Vietnam, Australia, New Zealand, Peru, Mexico, Chile, and Canada.
The juxtaposition of both pacts delineates an even broader and more integrated economic area, although they still differ on certain technicalities (labour and environmental provisions, dispute settlement mechanisms, etc.)
- Global container volumes fell 1.5% in 2020 while volumes on the routes from Eastern Asia to North America remained in strong positive territory (+5%) with good prospects in 2021.
- The World Intellectual Property Organization data shows that China overtook the US in innovation patents application in 2019. It also shows that around 65% of patents applications originated in Asia while the shares of Europe and North America are respectively down to 11% and 20%.
Asia is the common denominator. Definitely an option worth considering for European investors.
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