KIEP Newsletter Vol. 6 No. 3 | February 2, 2018 | Print
On November 14, 2017, the heads of RCEP Participating Countries (RPCs) announced 2018 as the new target year to conclude the RCEP negotiations. The RPCs had originally tried to achieve a substantial conclusion for the RCEP by the end of 2017, in time for ASEAN's milestone 50th anniversary, but as of yet such a substantial conclusion still remains a goal.
According to the GVC analyses, the vertical specialization between China, Japan and Korea (CJK) has deepened in the manufacturing sector, and some ASEAN countries ‒ e.g., Thailand, Indonesia, Malaysia and Viet Nam ‒ have been incorporated into the production networks of CJK. Among RPCs, the value-added in trade which crosses borders more than twice holds particularly high value in the "electrical and optical equipment" sector, and trade that Korea is a party to shows a relatively high ratio of multiple crossed value-added terms to its gross trade.
With the development of regional value chains in the RCEP bloc, the countries have become more interconnected and specialized in stages of production rather than in industries. If the RCEP lowers the trade barriers significantly, productivity gains can be expected by improving the efficiency of the value chain in the region. Given that mutual benefits of RPCs can be achieved on the same basis from the point of GVCs, RPCs could be brought closer to substantial conclusion by approaching from a GVC perspective.