Regional Comprehensive Economic Partnership (RCEP) Deal May Give a Strong Push to Polymer
by Chem Analyst Chemical Database PriceOn Sunday, 15 countries gathered to solidify their participation in
Regional Comprehensive Economic Partnership (RCEP) by signing a free-trade
agreement (FTA) to strengthen their trade ties and ensure easier availability
of goods and services across the countries. It is being predicted that trading
of polymer products is likely to receive a strong boost from the agreement
signed between the Asia-Pacific nations. Analysts anticipate that the most
immediate impact of RCEP could be the regionalization of polyethylene (PE) and
polypropylene (PP) trades within the Association of Southeast Asian Nations
(Asean) region, northeast Asia and Oceania.
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The silver lining could be the gradual reduction of import tariffs for PE
and PP stocks from northeast Asia-origin to southeast Asian countries such as
Thailand, Malaysia, the Philippines and Indonesia from 5-10% to not more than
5% over the next 10-20 years. Import tariffs for polymers from all origins to
Australia will also be curtailed from 5% to zero in the coming 20 years. Lower
freight rates and shorter transit times would also attract buyers in RCEP
nations. The FTA was signed by China, Japan, South Korea, Australia, New
Zealand and the 10 members of Asean. According to data from the International
Monetary Fund, RCEP nations hold nearly a third share in the global economy and
their combined gross domestic product stands at around USD 26 trillion. RCEP
was initially being negotiated between 16 countries- ASEAN members and Australia,
China, Korea, Japan, New Zealand and India. However, on November 4, 2019, India
backed out from the discussions over “significant outstanding issues”.
According to ChemAnalyst, India’s decision for opting out from RCEP is a
repercussion of its escalating tensions with China. India feared rising imports
and an uncomfortable exposure to Chinese products if it were a part of the
agreement, which could have interfered with the various measures it is taking
to reduce its exposure to China. However, this is likely to affect its
bilateral ties with RCEP nations in longer terms.
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Created on Nov 18th 2020 05:23. Viewed 130 times.