Where is the world’s largest free trade zone?

The world’s largest free trade area is in the ten ASEAN countries as well as China, Japan, South Korea, Australia, and New Zealand. This agreement sends an important signal to the outside world that member states are unswervingly building an open world economy, supporting the multilateral trading system, and promoting regional economic integration. Especially when the world economy is severely affected by the COVID-19 epidemic, RCEP will effectively promote regional trade and help economic recovery.

On November 15, 2020, the Fourth Regional Comprehensive Economic Partnership Agreement Leaders’ Meeting was held via video link. The meeting was chaired by Prime Minister Nguyen Xuan Phuc of Vietnam, the rotating chair of ASEAN. The ten ASEAN countries and 15 countries including China, Japan, South Korea, Australia, and New Zealand have officially signed the Regional Comprehensive Economic Partnership (RCEP), marking the official conclusion of the world's largest free trade agreement. Signing RCEP is an important step for regional countries to take practical actions to safeguard the multilateral trading system and build an open world economy. It is of symbolic significance for deepening regional economic integration and stabilizing the global economy.

A free trade area refers to a combination of countries or regions that have signed a free trade agreement. Member countries that have signed a free trade agreement cancel tariffs and quantitative restrictions on commodity trade with each other, allowing goods to flow freely among member countries.

Free trade zones developed from free ports. They are usually located in port areas or adjacent port areas, especially in economically developed countries. For example, the United States has 92 foreign trade zones. As early as the early 1950s, the United States proposed that manufacturing industries with export processing as the main goal could be developed in free trade zones. In the late 1960s, some developing countries took advantage of this form and built special industrial zones and developed them into export processing zones. Since the 1980s, free trade zones in many countries have developed into high-tech, knowledge- and capital-intensive forms, forming “technology-based free trade zones”.

The free trade zone allows foreign ships to enter and exit freely, foreign goods are imported duty-free, and the quota control on imported goods is cancelled. It is also a further extension of the free port and a special functional area for a country to open to the outside world.