Earlier this week, Australia and 14 other countries signed the Regional Comprehensive Economic Partnership (RCEP). The agreement, which includes 30 per cent of the global economy, marks the largest trade deal in history.
While leaders accepted the terms of the agreement – which took 8 years to negotiate – at the Association of South-East Asian Nations (ASEAN) summit last year, they did not formally bring it into effect until this week. For Arowana and our vocational and professional education and training (VPET) business EdventureCo, this validates our expansion into and across the ASEAN region. EdventureCo’s ICT training business, DDLS, recently opened a campus in Manila, and is focused on continuing to grow in the Philippines and South East Asia over the next decade.
The Arowana Impact Capital team has also recently focused on business opportunities in the ASEAN region.
The RCEP will bolster EdventureCo’s growth trajectory by supporting its current and future investments in ASEAN’s 10 member states – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam – which have some of the fastest growing middle classes in the world and place a premium on the value of education.
While the partnership does not give Australian businesses access to new markets, it does remove non-tariff barriers to trade by consolidating existing multilateral and bilateral trade agreements into a uniform set of trade rules. These rules make it less risky for companies like us to participate in the emerging markets above.
According to the Australian Government, the main benefits for the country will be:
- a single set of rules and procedures for accessing preferential tariffs in any of the 15 markets
- improved mechanisms for tackling non-tariff barriers, especially in areas such as customs procedures, quarantine and technical standards
- new scope for trade in services throughout the region, including across education, telecommunications, professional and financial services
- greater investment certainty for businesses
- rules on e-commerce to make it easier for businesses to trade online
- a common set of intellectual property rules
- agreed rules of origin that will increase the competitiveness of Australian inputs into regional production chains.
‘Greater openness within our region, as well as the greater integration of value chains and more common rules of origin – which this deal delivers – will make it easier for Australian businesses and investors to operate throughout our region, helping Australia to continue to grow our exports,’ said Trade Minister Simon Birmingham.
‘There are particular gains for Australian providers within the financial services sector, education, health, engineering and other professional services, who can become better integrated within the region and have more access within RCEP countries.’