RCEP is a free trade agreement (FTA) between Asean member states and its six FTA partners, namely Australia, India, Japan, South Korea and New Zealand.

The Ministry of Finance, in its Economic Report 2014-2015 released today, said RCEP would advance economic cooperation as well as broaden and deepen regional integration, building upon Asean's existing economic linkages.

The report is issued in conjunction with the tabling of the 2015 Budget in Parliament today by Prime Minister Datuk Seri Najib Abdul Razak, who is also Finance Minister.

Asean has implemented FTAs with Australia, China, India, Japan, South Korea and New Zealand (known as Asean+1 FTAs).

Malaysia, as a member of the Asean+1 FTA, has already implemented various commitments through liberalisation of import tariffs, services and investments.

Along with the existing FTAs, RCEP is equally important as it would create the world's largest trading bloc and has major economic benefits for Asean countries and the world as well as deepen relationship between the participating countries and progressively lower tariff and non-tariff barriers.

The RCEP partnership agreement is aims at establishing an open trade and investment environment in the region, and facilitate the expansion of regional trade and investment as well as boost economic growth and promote balanced economic development, it said.

In the report, it pointed out that RCEP represents 49% of the world's population, 30% of the world's gross domestic product and 40% of global trade.

The report said against the backdrop of different levels of development among the participating countries, RCEP would include appropriate forms of flexibility, including provision for special and differential treatment, with additional flexibility for the least-developed Asean member states.

"The timely conclusion of RCEP will enhance the integration of the Asean Economic Community into the global economy," the report said.

As of June 2014, five rounds of RCEP negotiations had taken place and they are expected to be concluded by the end of 2015.

Source: bloomberg.com