2020 has been a tough year, especially for Australia and China. However, RCEP brings new hope for Australians. Here’s how RCEP can save the Australia and China trade relationship.
Among the many calamities of 2020, the Australia and China trade relationship is the biggest disaster for the south-Pacific side of the world. The looming danger of a trade war is something both nations aren’t prepared for. The decision of trade ban amidst the pandemic could drive China and Australia into financial crises, probably more so for Australia than China, as the size of both economy vary greatly. However, there is light at the end of the tunnel. The RCEP agreement might save both nations from making a mistake they will regret in the future.
The Regional Comprehensive Economic Partnership is probably the best news for the World economy in 2020. The RCEP is a China-backed initiative that could become the world’s largest trade agreement, with Australia in the middle. Since the Free Trade Agreement (FTA) aims to broaden the trade landscape and strengthen economies, it can alleviate the financial stress brought by COVID19 and fix the damaged trade between Australia and China.
The RCEP seeks to unite Australia with the Association of Southeast Asian Nations (ASEAN). This will open tremendous opportunities for Australian entrepreneurs to export their products and strengthen the Australian economy.
The RCEP agreement will open new markets for Australia to increase its exports. This initiative will allow easy access to 15 ASEAN countries, accounting for one-third of the world population. The agreement opens a world of opportunities for Australia in sectors other than agriculture and wine. Here are the benefits Australians can enjoy after the RCEP agreement.
A new single set of rules and procedures for accessing preferential tariffs in any of the 15 RCEP markets
A new scope for the trade of services throughout the region, including across telecommunications, professional and financial services.
Improved mechanisms for tackling non-tariff barriers, including in areas such as customs procedures, quarantine, and technical standards.
Greater investment certainty for businesses.
Rules on e-commerce to make it easier for businesses to trade online.
A common set of rules on intellectual property.
Agreed rules of origin to increase the competitiveness of Australian inputs into regional
A face saver for both Australians and Chinese, amidst the dilemma.
Australia and China have locked themselves in a tough situation, and hidden foreign agendas continue to affect the trade partnership between the two countries. After Canberra suggested an investigation in the novel coronavirus, China has shown a furious reaction to the trade ban. Both nations are in a battle to show their strength while damaging their economies as a consequence. However, the RCEP agreement seems to be a beacon of hope for both nations to sit and consider a diplomatic approach.
The false news and allegations from Australian media have done more bad than good, and it has become a source of entertainment in the pandemic. While the world is slowly recovering from the damages of COVID19, we must realize that a trade war is not an option at the moment. The Australia China entrepreneurship club is trying its best to keep both nations on the path of economic growth. If you want to learn more about Australia-China trade, click here.