The Regional Comprehensive Economic Partnership (RCEP) entered into force on 1 January 2022 for its first ten ratifying members — Brunei, Cambodia, Laos, Singapore, Thailand and Vietnam among the ASEAN states, alongside Australia, China, Japan and New Zealand. More than four years on, the agreement's defining feature is still working through its system: a tariff-elimination schedule that, for some product lines and country pairs, does not reach zero until 20 or more years after entry into force.
A staggered start, and a staggered finish
Not every RCEP member joined on the same date. South Korea followed on 1 February 2022, Malaysia on 18 March 2022, Indonesia on 2 January 2023, and the Philippines — the last of the fifteen signatories to ratify — on 2 June 2023, 60 days after depositing its instrument of ratification with the ASEAN Secretariat. That staggered accession means the tariff clock started running at different points for different bilateral trade relationships within the same overall agreement, which is one reason the deal's cumulative effect is harder to summarise in a single figure than a conventional bilateral trade agreement would be.
The tariff schedules themselves are similarly uneven. According to an analysis published by the Asia-Pacific Economic Cooperation policy support unit, liberalisation periods across RCEP members range from immediate elimination at entry into force to as long as 21 years for certain product lines. Singapore stands out as the exception, having liberalised tariffs on essentially all goods immediately when the agreement took effect. China, by contrast, applies multiple staggered timetables even to trade with the same partner — its schedule for eliminating tariffs on Japanese goods, for instance, spreads across four separate periods: immediate cuts at entry into force, then further reductions at 11, 16 and 21 years. Overall, RCEP is expected to eliminate roughly 92% of tariffs on trade within the bloc over the full 20-year implementation window, according to figures compiled from the agreement's tariff schedules.
Why the slow build matters more for some economies
The size of the tariff cut a given RCEP member sees depends heavily on how liberalised its trade already was before the agreement. Members that had already signed extensive bilateral or ASEAN-wide free trade agreements, much of intra-ASEAN trade among them, see a smaller marginal benefit from RCEP, since tariffs between those countries were often low or zero already. The bigger structural shift falls on trade relationships that previously had no free trade agreement at all, most notably between China, Japan and South Korea, three major economies that had never before been linked by a single trade pact despite decades of dense trade flows between them. Research from the National University of Singapore's Asia Competitiveness Institute has found that RCEP's added preference margin, the gap between RCEP tariff rates and what existing agreements already offered, is largest for exactly those previously unlinked pairs, and comparatively small for members like Brunei, where nearly all tariffs from RCEP partners were already close to zero under existing ASEAN frameworks.
What the agreement covers beyond tariffs
Tariff elimination is the most quoted figure attached to RCEP, but the agreement also sets common rules across the bloc for trade in services, e-commerce and intellectual property, areas where, unlike tariffs, changes take effect on a common timetable rather than a staggered one tied to each product line. RCEP covers roughly 30% of global GDP and around a third of the world's population across its fifteen members, making it the largest free trade agreement in the world by that measure, ahead of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which overlaps with RCEP across seven shared member economies. India took part in the original negotiations for eight years before withdrawing shortly before the agreement was signed in November 2020, and it remains outside RCEP as of the agreement's current membership.
For businesses trading across the bloc, the practical consequence of the long phase-in is that the tariff advantage RCEP offers over a company's next-best alternative, usually an existing bilateral agreement or standard World Trade Organization rates, keeps shifting year by year rather than arriving all at once. A shipment that qualifies for a modest preference margin today may see that margin widen substantially by year ten or fifteen of the schedule, depending on the specific product and country pair involved, which is part of why customs and trade compliance teams operating across RCEP markets are having to track tariff schedules on a rolling basis rather than treating the deal as a fixed, one-time change from 2022.
Qualifying as "originating" under one common rule
Tariff preferences under RCEP only apply to goods that meet the agreement's rules of origin, and the headline test used across most product categories is a regional value content (RVC) threshold of 40%, meaning at least 40% of a good's value must originate within the RCEP bloc for it to qualify for preferential treatment. For a number of product lines, exporters can instead satisfy origin requirements through a change in tariff classification test, and for some chemical products a specific chemical-reaction rule applies as a further alternative. RCEP also permits the RVC calculation to be done using either an indirect, build-down formula based on the value of non-originating inputs, or a direct, build-up formula based on the value of originating materials, giving exporters some flexibility in how they demonstrate compliance.
Trade analysts have noted that the 40% threshold is relatively liberal by the standards of major modern trade agreements — well below, for instance, the 75% regional value content the USMCA requires for passenger vehicles trading between the United States, Mexico and Canada. RCEP also allows cumulation, meaning materials that already qualify as originating in one member country can be treated as originating when used in production in another member country, which lets manufacturers source components across the fifteen-member bloc without losing preferential treatment at the border. For businesses that previously had to satisfy separate origin rules under each of the overlapping ASEAN+1 agreements, RCEP's single, common rulebook is one of the more concrete simplifications the agreement delivers alongside the tariff cuts themselves.