SME

By Kawal Preet | March 21, 2025

Has the world’s largest free trade agreement boosted cross-border trade in Asia Pacific? We look at ways the Regional Comprehensive Economic Partnership (RCEP) is benefitting importers and exporters and fostering intra-Asia growth.

• The Regional Comprehensive Economic Partnership (RCEP) unifies trade rules to lower tariffs, reduce red tape, and foster stronger cross-border trade in Asia Pacific.
• Imports and exports between RCEP countries surge as they leverage newly formed trade agreements to bolster intra-Asia commerce.
• However, businesses must still navigate import-export challenges in Asia, such as new tariff structures, supply chain shifts, and cross-border shipping.

Given the sheer size and diversity of the Asia-Pacific region, one might think: what ingredients make cross-border trade in APAC successful? 

Aside from the logistical challenges that the region’s complex geography presents, importers and exporters have to contend with varying regulations, tariffs, and customs procedures across countries. But once you get over these challenges, the rewards can be substantial. 

A major trade deal has broken down barriers to cross-border trade in Asia Pacific: the Regional Comprehensive Economic Partnership (RCEP). Since coming into effect, the RCEP has introduced a more unified set of trade rules that lower tariffs, reduce red tape, and ease import-export challenges in Asia Pacific.

At FedEx, we see firsthand the economic impact of the RCEP, including how it can facilitate intra-Asia trade. Can the agreement bring Asia Pacific closer to becoming a truly borderless, free trade bloc? Let’s unpack the opportunities for importers and exporters under the RCEP.  

How importers and exporters benefit from the RCEP

The RCEP currently covers all 10 ASEAN member-states plus Australia, China, Japan, South Korea, and New Zealand. Breaking down trade barriers across these member economies could only spell a massive economic boom. By 2030, the RCEP can increase the trading bloc GDP by 0.4%, equivalent to US$170 billion. 

This potential is further amplified by interest from other economies, such as Hong Kong, to join. The December 2024 inauguration of the ASEAN Secretariat’s RCEP Support Unit also signals a deeper commitment to supporting businesses as they navigate the evolving needs and challenges of trade under the RCEP, paving the way for further growth.

Examining its key trade policies, we see a few opportunities emerging for importers and exporters as the RCEP matures.

1. Lower tariffs and duties

The RCEP progressively eliminates duties for at least 92% of goods traded among RCEP members. This gradual reduction or elimination of tariffs makes products more cost-competitive.

Say you’re an Indonesian furniture maker exporting to South Korea, for example. You can review new tariff rates, lowering your prices slightly to gain a competitive edge over non-RCEP exporters. Take advantage by regularly checking updated tariff schedules and adjusting your pricing strategies accordingly. 

2. Smoother customs clearance

Thanks to the RCEP, a single set of rules now streamlines customs processes across multiple countries. For example, the trade deal sets a 48-hour target for customs clearance of goods and requires all member countries to ensure transparency and consistency. These simplified customs procedures facilitate trade, lower transaction times, and make border measures more transparent.

By working with customs brokers or logistics providers, small businesses can confidently navigate international trade, ensure seamless compliance and unlock new growth opportunities. A Thai agricultural exporter, for example, could work with a logistics provider like FedEx that automates customs paperwork to ensure faster clearance at ports.

3. Broader market reach

Another remarkable thing about the RCEP is its scale. It’s currently the world’s largest free trade agreement with 15 member countries. Combined, its member economies account for about 30% of the global GDP and a third of the world’s population. 

Leveraging the RCEP is an effective strategy to unlock cross-border trade across the broader Asia-Pacific region with about 4.3 billion potential consumers. That’s about 60% of the world’s population within your reach. And you’ll also be able to participate in a bustling economy with a gross domestic product (GDP) of about US$116 trillion, nearly 55% of the global GDP. 

How the RCEP fosters intra-Asia trade 

With the trade pact having taken effect in January 2022, we’ve seen how different RCEP countries can maximize its benefits. One trend we’re noting is the continued uptick in imports and exports between RCEP countries. 

As early as 2022, intra-RCEP exports have been surging. On average, intra-RCEP exports grew by 11.5%, while intra-RCEP imports rose by 6.8%. Take China’s trade with RCEP countries as an example. In the first quarter of 2022 alone, it grew by 6.9% year-on-year to about US$448.6 billion. 

Another trend we’re seeing is how the RCEP also fosters trade between countries with no outstanding free trade agreements (FTA). For example, the RCEP is Japan’s first FTA with China and South Korea. Japanese companies now enjoy lower tariffs and duties when exporting to China, South Korea, and other RCEP countries.  

Overcoming trade logistics challenges

While the RCEP provides a strong framework to encourage intra-Asia trade, businesses still have to contend with the everyday realities of trade logistics. There are a number of challenges importers and exporters might encounter now that the RCEP has taken effect: 

1. New tariff structures

Depending on the country, there’ll be varying schedules of tariff commitments. It’s crucial to stay updated on these tariff commitments so that you can take full advantage of the RCEP. Check with trade consultants regularly, or use digital tariff-tracking tools to help your business adapt quickly.

2. Supply chain shifts

With lower trade barriers, businesses must rethink their sourcing and distribution strategies. Especially considering the RCEP’s cumulative rules of origin, which require at least 40% of the raw materials to come from RCEP countries for products to receive preferential tariff rates. 

For example, a textile manufacturer in Vietnam could start sourcing cotton from Australia instead of non-RCEP countries to benefit from lower import duties.

3. Cross-border shipping

Efficient logistics is still key to maximizing the RCEP’s benefits. Leveraging end-to-end logistics solutions can simplify processes, offering near-real-time tracking and customs expertise. You can also tap into fulfillment hubs in strategically located RCEP countries to speed up deliveries and reduce shipping costs.

To better position themselves to overcome these challenges, Asia Pacific businesses can tap into smart logistics and digital trade platforms. These solutions help importers and exporters navigate customs, track shipments, and optimize supply chains to improve efficiencies and reduce delays.    

Unlocking Asia Pacific’s gateway to growth 

Ultimately, the RCEP is more than just a trade agreement – it’s a gateway to growth. The deal is set to ramp up cross-border trade in Asia Pacific, contributing US$500 billion to the world economy by 2030. It’s a testament to how an open world economy is possible with the right trade policies, processes, and standards in place.   

At FedEx, we’re here to help businesses in Asia Pacific seize opportunities from this landmark trade deal. By enabling enterprises to move high-value and time-sensitive shipments, supply chain continuity can help meet the needs of an open world economy. 

As businesses continue to adapt to the RCEP, those that stay informed, embrace digital trade tools, and leverage strong logistics partnerships will be best positioned to succeed.