Ten years after it was conceived at the 2011 Asean Summit in Bali, the world's largest trade pact - covering some 30 per cent or US$26 trillion (S$35 trillion) of global gross domestic product and 30 per cent of the world's population - kicked in last Saturday, slashing tariffs for businesses for about 92 per cent of goods traded among parties for which the Regional Comprehensive Economic Partnership (RCEP) agreement entered into force. They are Australia, Brunei, Cambodia, China, Japan, Laos, New Zealand, Singapore, Thailand and Vietnam. The pact will enter into force for South Korea on Feb 1. Indonesia, Malaysia and the Philippines are expected to ratify it soon, while Myanmar's ratification is pending acceptance by other members.

The RCEP is also the first time China, Japan and South Korea are in the same free trade agreement (FTA). It covers areas such as intellectual property, competition policy, e-commerce and government procurement. Being a signatory confers advantages. Besides tariff elimination, businesses benefit from additional preferential market access for products, including mineral fuels, plastics, other chemical products, miscellaneous food preparations and beverages in markets such as China and Japan. Some estimates suggest it will remove tariffs on 86 per cent of Japan's exports to China, up from 8 per cent of goods that are now tariff-free. Japan's tariff-free exports to South Korea will also grow from 19 to 92 per cent.