Extrusion International 1-2023-USA

28 Extrusion International 1/2023 CHINAPLAS 2023 CHINAPLAS 2023 – Packing in Industry Opportunities with RCEP A sia’s Regional Comprehensive Economic Partnership (RCEP), the world's largest free trade agree- ment (FTA) enforced in January 2022, offers a bountiful of oppor- tunities for the plastics, rubber and petrochemicals sectors in various aspects, giving Asia's advanced and emerging markets a much-needed economic boost. Rebound of Asia’s economy Asia's trade growth was severely impacted by the pandemic. Slower growth and rising prices, as well as lower demand from recession-rav- aged United States, China, Europe, and other trade partners, have also affected growth in Asia. Nonethe - less, the region's GDP is expected to grow by 4.4% in 2022 and rise to 4.9%by 2023, according to the Inter - national Monetary Fund (IMF) 2022 regional economic outlook data. Thus, bolstering trade is a strategy that is expected to accelerate recov- ery. FTAs signed by Asia's advanced and developing economies, as well as emerging markets, provide a much-needed economic boost for the region. The Association of Southeast Asian Nations (ASEAN), which rep- resents a market of more than 600 million people with a total com- bined GDP of US$3.2 trillion in 2019, has seven trade agreements, includ- ing the Regional Comprehensive Economic Partnership (RCEP), which was signed in November 2020 and took effect in January 2022. RCEP is a free trade agreement (FTA) between the ten member states of ASEAN (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myan- mar, the Philippines, Singapore, Thailand, Vietnam) and its five FTA partners (Australia, China, Japan, New Zealand and Korea). It is the world's largest FTA, covering 30% of the world's GDP and population, as well as approximately 30% of to- tal global trade, and is the first FTA among the largest economies in Asia Pacific. Currently the world's fifth larg - est economy, ASEAN is expected to become the world's fourth-largest economy by 2030, with a consumer market worth more than US$4 tril- lion. This expansion will be aided further by RCEP. For example, RCEP members account for 40% of ASE- AN’s investments, while non-ASEAN RCEP members account for 24%. Reinforcing the plastics value chain; a win for petrochemicals The plastics value chain has been subjected to a number of disruptive events, prompting Asian companies and businesses to implement strate- gies to make their business models resilient to supply chain disruptions. The RCEP's trade liberalization and preservation of multilateral trading systems can generate differ- ent trade opportunities for ASEAN and non-ASEAN member countries, thereby accelerating the region's economic recovery. Petrochemicals, which are essen- tial in the production of raw mate- rials such as polymers used in pack- aging, electronics, construction and other applications, are expected to trade strongly within the RCEP alli- ance. Notwithstanding the supply dis- ruptions and geopolitical volatility, the International Energy Adminis- tration (EIA) predicts that the pet- rochemicals sector will secure more than a third of global oil demand growth by 2030 and nearly half of demand growth by 2050. China is one factor expected to influence this growth. The colos - sal country is expected to generate significant petrochemical demand, rising to 780 million tonnes per year by 2030, according to the NPC Economics & Technology Research Institute (ETRI). Meanwhile, Thailand's petro- chemical industry, which is the larg- RCEP aims to align ASEAN's existing FTAs and partnerships with the other five partner economies in a bid to reduce trade barriers and improve investment regulations