RCEP Set to Boost Demand for Talents in Asia
Source: Official website of the Ministry of Trade and Industry, Singapore
29 January 2021 — On 15 November 2020, Singapore and 14 countries, including China, officially signed the Regional Comprehensive Economic Partnership (RCEP) agreement, arguably the world's largest ever free trade agreement (FTA).
At the time, Chan Chun Sing, Minister for Trade and Industry from Singapore, remarked that the RCEP was a key regional agreement that would promote greater economic integration in the region.
Chinese Premier Li Keqiang said that the free trade bloc has the largest participating population in the world, the most diverse membership and the greatest development potential. The signing of the RCEP was hailed not only as a landmark achievement of East Asian regional cooperation, but also a victory of multilateralism and free trade.
In the shadow of the novel coronavirus (COVID-19) pandemic, a stronger Asia capable of driving global economic growth is opening up more opportunities and boosting demand for new talent.
More Opportunities
Source: Official website of the Ministry of Trade and Industry, Singapore
The RCEP is made up of the 10 Association of Southeast Asian Nations (ASEAN) Member States (Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam), China, the Republic of Korea, Japan, Australia and New Zealand. It is the world’s largest FTA, comprising about 30% of global Gross Domestic Product (GDP), or S$35 trillion, and about a third of the world’s population.
With the signing of the RCEP, there are ten key benefits for regional businesses:
1. Trade in Goods
Elimination of tariffs on at least 92% of goods traded amongst RCEP Participating Countries (RPCs). Additional preferential market access for Singapore’s exports as well as stronger provisions to allow duty-free temporary admission of goods into the region.
2. Non-Tariff Measures (NTMs) Provisions
Stronger provisions to address NTMs, including improving the transparency on import regulations.
3. Rules of Origin
Streamlined rules in key sectors include Processed Food and Chemicals & Plastics, and greater flexibility for businesses to tap on preferential market access benefits and regional supply chains.
4. Customs Procedures and Trade Facilitation
Simplified customs procedures to allow efficient administration of procedures and expeditious clearance of goods.
5. Trade in Services
Full opening of at least 65% of services sectors (including Professional Services, Telecommunications and Financial Services) to ensure transparency of regulations and measures.
6. Investment
Commitments to prohibit performance requirements on investors as conditions for entering, expanding or operating in RPCs. This item also includes a work programme on investor-state dispute settlement provisions.
7. Electronic Commerce
Enhancements in areas such as online consumer protection, online personal information protection, transparency, paperless trading and acceptance of electronic signatures. It also includes commitments on cross-border data flows.
8. Intellectual Property (IP)
IP protection can be obtained by businesses, including for non-traditional trademarks and a wider range of industrial designs. RPCs have also agreed to accede to IP treaties and to simplify the application process.
9. Competition
Maintenance of competition law regimes based on international best practices. This protects businesses from anti-competitive activity.
10. Government Procurement
Publication of laws, regulations and procedures to allow greater transparency for businesses to pursue government procurement market opportunities in the region.
The mutual benefits, value and opportunities created among the RPCs also call for regional talent in Asia that can play an important role in economic and cultural interactions.
Regional Perspectives and Cooperation
Many observers agree that the RCEP will spur regional trade through its “rules of origin”, which specify how one RPC can produce products and enjoy tariff preferences when selling them in the market of another. In simple terms, this means less tax for products that use more parts and resources originating from RPCs. Obviously, regional manufacturers and supply chains stand to benefit greatly from this.
For example, an automobile might be produced at a lower cost in Japan, because of the RCEP facilitating the sourcing of parts from Korea, China, Thailand and Malaysia.
In general, individual RPC economies are expected to become more efficient, contributing towards the region’s ability to compete globally in terms of economic growth and attracting investors as well as international trade partners.
Additionally, it is anticipated that greater cooperation and openness among China, Japan and South Korea will create a technological powerhouse to drive innovation and economic growth.
Overall, because the RCEP lays the foundation for greater communication and cooperation to occur within the Northeast and Southeast Asian region, observers see Asia continuing to cement its place as a leading player in the global economy.
Impact on Talent Market
An interesting feature of the RCEP is its implementation period of 20 years. This provides talent markets in the region with a window of opportunity during which they can position themselves to best take advantage of the potential benefits of the RCEP.
As mentioned, technology, manufacturing and supply chain will likely be the industries most directly impacted by the RCEP. Incidentally, these are also the industries most closely linked to the fourth industrial revolution, Industry 4.0.
This signals a trend over the next two decades for greater emphasis on more technological and technical competencies within the workforce. Cross-functional roles (which will require talents to have competencies across a range of areas) are also probably going to become more commonplace.
Talent markets within the region can prepare themselves to make the most of the RCEP by equipping themselves with the skillsets that will be most in-demand as the economies of RPCs evolve following the roadmap set by the trade agreement. Current expectations are that the demand for talent with technology- and engineering-related competencies will continue to grow. Networking and communications, data science, virtual and augmented reality, cybersecurity, automation and artificial intelligence are all earmarked for growth.
Longer Term Outlook
The COVID-19 pandemic in 2020 has had a great impact on the global economy, disrupting supply chains, manufacturing operations and businesses in general. The RCEP is expected to cushion (possibly even reverse) some of these effects.
Projecting forward, the Petersen Institute for International Economics estimates that the RCEP might increase global national income by about S$247.41 billion annually by 2030. However, this may need to be tempered by current uncertainties, including the outcome of worldwide COVID-19 vaccinations, the stance that Joe Biden and the incoming US administration will take in international trade and relations, and the question of whether India will relent and rejoin the RCEP (after exiting negotiations in November 2019).
Regardless of how things eventually play out, the world will have to grapple with a new normal. Already, individuals are starting to realise that the only certainty they can rely on is that the future is uncertain. The challenges of this era will probably be ill-defined and ever-changing, requiring multi-disciplinary solutions (which may even involve taking a stand against established conventional wisdom). Against this backdrop, adaptability and flexibility will be key.