RCEP's Next Act: Expansion, Execution, and China

The Regional Comprehensive Economic Partnership (RCEP), the world's largest free trade agreement, may soon expand. A recent report from the Philippine Daily Inquirer indicates that member countries are considering new applicants, with Hong Kong often cited as a likely candidate. While the addition of new economies is a significant development, the more immediate task for the bloc's existing members is the execution of the agreement's complex provisions.

Execution Over Expansion

The RCEP agreement, which entered into force in January 2022, is an ASEAN-led initiative that includes China, Japan, South Korea, Australia, and New Zealand. Its primary achievement was not just its scale, but its consolidation of a network of overlapping bilateral agreements into a single, comprehensive framework. The agreement aims to streamline trade by standardizing rules of origin, customs procedures, and technical standards.

However, the full benefits of the pact depend on consistent and effective implementation by all member states. This requires a substantial investment in institutional capacity. National customs authorities, trade ministries, and regulatory bodies must align their operations with RCEP's detailed requirements. For many ASEAN members, this is a multi-year process involving technical upgrades, staff training, and regulatory reform. The focus for businesses and policymakers alike should be on the practical work of making the agreement function as intended, which is a prerequisite for any successful expansion.

Managing China's Influence

Expansion talks also bring the strategic dimension of RCEP into focus, particularly regarding China. The agreement institutionalizes China's role as the primary economic anchor in the region. As the book "ASEAN Rising" notes, for ASEAN governments, the core issue is "how to manage dependency without losing optionality." The RCEP framework is a tool for just that. It provides a multilateral structure for trade with China, governed by a common set of rules that apply equally to all members.

This institutional buffer is a moderating influence. By embedding its trade relationships with China within a broader, ASEAN-centered framework, the bloc can better manage the asymmetries in economic power. The accession of new members would further diversify the agreement's composition, but it would not alter the fundamental reality of China's weight in the regional economy. The task for ASEAN is to use the RCEP institutions to ensure that its relationship with China remains one of managed interdependence, not over-dependence.

The Talent and Trust Deficit

Successfully implementing RCEP and navigating its strategic complexities requires more than just institutional reform. It also demands a deep pool of talent. Governments and the private sector need professionals who understand the nuances of trade law, logistics, and digital commerce under the new rules. This requires investment in education and professional development, a long-term project in which many ASEAN nations are already engaged.

Trust is the final, indispensable element. For RCEP to function, member states must have confidence that their partners will adhere to the rules. Likewise, businesses must trust that the frameworks established by the agreement will be applied predictably and fairly. Building this trust is a slow process, rooted in the consistent and transparent execution of the agreement's terms. Any future expansion of RCEP will depend on the strength of the foundation of execution and trust that is being built today.

What to watch

As RCEP members deliberate on expansion, the key indicators to watch are not just the announcements of new candidates, but the progress on the ground. Observers should monitor the degree to which non-tariff barriers are actually being dismantled, the extent of digitalization in customs procedures, and the utilization rates of RCEP's preferential tariffs by businesses, especially small and medium-sized enterprises. The success of RCEP's next chapter will be measured by these practical outcomes, not by the size of its membership roster.