HKUST Business School Magazine

Asia for Asia 15 Markets Preferential Certification Institutional Platform Customs Clearance Express Shipments Biz@HKUST Biz@HKUST 22 23 // Cover // Thought Leader The latest example of such an agreement is the Regional Comprehensive Economic Partnership (RCEP), which is likely to be established in 2022. This is set to become the largest trade bloc in history, and could become a global game changer because of its sheer size and the fact it includes China. Built on ASEAN’s own model agreements, it would include 15 Asia-pacific nations accounting for 30 percent of the world’s population and 30 percent of global GDP as of 2020. It will unify any pre-existing bilateral agreements between ASEAN nations and five of its major trading partners. Asia leads the charge Such an ambitious trade pact, according to Elms, is a sign of things to come. In this case, Asia is leading the charge. “Asia is pragmatic, and for them, economics has always trumped everything else. So economics comes first, and politics and security after that,” she says. This was evident in the RCEP negotiations, where participating governments would not have been in the same room if political or strategic reasons had been taken into account. Elms says that it is almost a rule in Asia that such issues are compartmentalized, and countries manage their conflicts in isolated areas. Where there are no conflicts, it’s business as usual. She cautions that while the development of the bloc is promising, the extent that COVID-19 will devastate societies, communities and the economic structures in the region, is still a worry. How COVID-19 plays out remains to be seen. Elms feels that the US economy could become less dominant over time as Asia becomes a more important final market. Asian companies are now becoming powerful competitors by formulating new innovative solutions that are not just copies of Silicon Valley solutions. RCEP – Transforming Regional Trade RCEP will transform trade in the region into “ Asia for Asia ”, and Asia will be thought of as the final market. Businesses can start to make “Asian” qualifying goods for shipment across 15 Major Markets . RCEP will use a Preferential Certification of origin document that will be the same for all member countries. Customs Clearance will be easier, faster and more transparent. There will be Express Shipments on goods, and less complicated documents and paperwork. RCEP will become the Institutional Platform to address all trade and economic policies in Asia, including the creation of new trade rules, standards, and procedures. Win-win outcomes Elms says that cooperation in international trade may also become a “coalition of the willing”. For example, she says an agreement could tie Canada, the UK, Singapore and Thailand to a country in Africa around an issue that all the participants agree upon. “It won’t be a regional deal, but a group of countries which all see the potential for a win-win outcome if they collaborate,” she says. What does this all mean for business education? According to Elms, the world is changing quickly, and industries are changing rapidly. Everyone will have to learn something about digital strategies, but it’s essential that students still receive a broad education. “You have to be able to work independently, you have to be able to work in groups, and with diverse groups,” she says. We are no longer working in insular pockets, but with people in other countries who are from different cultures and speak different languages. Moreover, we may be doing it remotely. “Because of this, the value of a good education is actually higher now than it’s ever been,” Elms says. 15 30% 30% Asia-Pacific Nations of World’s Population of Global GDP