The regionalization of global trade (intra-regional trade) and supply from close geographies (nearshoring) have been on the agenda of the World Trade Organization (WTO) since last year due to global supply chain problems caused by the coronavirus pandemic. In the post-pandemic period, these two topics will gain momentum. We have already started observing its impact on Turkey's exports. As a matter of fact, this year, Turkey's exports may break a new record in the history of the republic with $250 billion (TL 3.69 trillion) in revenue, thanks to increased orders from Europe and its close geography.
In the early 2000s, the share of intra-regional foreign trade between Asian countries was only 16%. This figure doubled in 2010 to 32% and reached 60% in 2020. Europe's intra-trade, trade taking place within the continent, makes up 70% of its total foreign trade. Turkey gets its share from this ratio in terms of export volume. But when you look at North America, the rate drops to 30% while it is 18% in Latin America and 25% in Africa. These days, Asia-Pacific is taking a new leap forward in intra-regional trade and nearshoring.
The Regional Comprehensive Economic Partnership (RCEP), whose negotiations began in 2012 and was signed by China, Japan, South Korea, Australia, New Zealand and 10 member countries of the Association of Southeast Asian Nations (ASEAN) on Nov.15, 2020, officially went into effect in 12 of the 15 countries as it was ratified in Malaysia on March 18. Less than three months after the RCEP officially entered into force in China, Brunei, Cambodia, Laos, Singapore, Thailand, Vietnam, Japan, New Zealand and Australia on Jan. 1, and in South Korea on Feb. 1, the intra-regional trade with RCEP partners has increased by 9.5%.
The RCEP has provided Asian countries the opportunity to increase trade among themselves and stay safe from global uncertainties by relying on trade with member countries. China's exports to the RCEP member countries reached $293 billion, which corresponds to about 30% of China's total exports. It is expected that the cooperation potential between countries will increase with the implementation of zero customs duty and the implementation of various systems within the region and the scope of the RCEP. Considering the capabilities of Asian countries in the field of e-commerce, the partnership aims to introduce new standards to the e-commerce rules for the member countries in the region covered by the RCEP.
Only in China, the e-commerce sales volume over the internet has reached $1.6 trillion. The e-commerce rules standardized with the RCEP will contribute to the creation of a more qualified and easier-to-operate online business environment in the region. The exponential increase in the number of internet users every year in Asian countries is the most important indicator of the extraordinary potential of this agreement. With the full activation of the RCEP, it is aimed to gradually introduce zero tariffs in more than 90% of the trade in the region, which will mean a “regionalized trade” even greater than the EU Customs Union.
