At the 4th RCEP Ministers’ Meeting in Kuala Lumpur, Malaysia leads the approval of five new entrants—Bangladesh, Sri Lanka, Chile, Hong Kong SAR, and Costa Rica—marking a historic expansion of the world’s largest trade pact, now poised to account for nearly half of global trade.
By Dr Mohd Safar Hasim
In a landmark move that could reshape global trade flows, the Regional Comprehensive Economic Partnership (RCEP) has agreed to initiate accession talks with five new economies: Bangladesh, Sri Lanka, Chile, Hong Kong SAR, and Costa Rica. The decision was formalised on Sept 25, 2025, at the 4th RCEP Ministers’ Meeting in Kuala Lumpur, chaired by Malaysia’s Minister of Investment, Trade and Industry, Tengku Datuk Seri Zafrul Abdul Aziz.
This expansion marks the most significant enlargement of RCEP since its inception, and positions the bloc to account for nearly 50% of global trade, according to figures released by MITI Malaysia.
Already comprising 15 member economies—including China, Japan, South Korea, Australia, New Zealand, and all 10 ASEAN states—RCEP currently represents:
* 30% of global GDP
* 28.4% of global trade
* 29.5% of global foreign direct investment (FDI)
* 2.3 billion people
With the inclusion of the five new applicants, RCEP’s reach could expand to over 2.7 billion people, and its trade share could approach half of all global trade, depending on integration timelines and sectoral coverage.
Expansion with Strategic Depth
Each of the five new applicants brings distinct strategic value:
* Bangladesh: A rising export powerhouse in garments, pharmaceuticals, and ICT, poised to graduate from Least Developed Country (LDC) status in 2026. Its bid reflects a pivot away from South Asia’s fractured trade architecture.
* Sri Lanka: A maritime hub seeking post-crisis recovery and deeper East Asian linkages.
* Chile: Latin America’s most trade-liberal economy, already part of CPTPP, now looking eastward to diversify partnerships.
* Hong Kong SAR: A financial gateway with deep integration into China’s economy and longstanding trade ties with ASEAN.
* Costa Rica: A Central American economy with strong sustainability credentials and growing interest in Asia-Pacific supply chains.
No objections were raised by existing RCEP members. The Ad Hoc Accession Working Group (AWG) has been tasked to begin formal negotiations, with Malaysia playing a key role in facilitating consensus and procedural clarity.
Malaysia’s Convening Power
Malaysia’s leadership at the 4th RCEP Ministers’ Meeting reflects its growing stature in regional economic diplomacy. As both ASEAN Chair and RCEP host, Malaysia is uniquely positioned to shape the bloc’s trajectory.
Key outcomes from the ministerial-level meeting include:
* Endorsement of Accession Terms: Malaysia led efforts to formalise the AWG’s Terms of Reference, ensuring transparency, high standards, and equitable treatment for new entrants.
* Trade Facilitation Push: Emphasis on digital trade, customs harmonisation, and supply chain resilience.
* Preparation for the RCEP Leaders’ Summit: Malaysia confirmed that the first-ever RCEP Leaders’ Summit will be held in October 2025, also in Kuala Lumpur, alongside the 47th ASEAN Summit.
This will be the first time heads of government convene under the RCEP banner since the agreement came into force in January 2022.
Expansion with Purpose
The expansion of RCEP is not merely symbolic—it reflects deeper strategic currents:
* Post-COVID Realignment: Countries are diversifying trade partners and reducing dependence on Western markets.
* South Asia’s Pivot East: Bangladesh and Sri Lanka’s bids highlight the dysfunction of SAARC and the appeal of ASEAN-led frameworks.
* ASEAN’s Centrality Reinforced: With Malaysia at the helm, ASEAN reasserts its role as a convener of inclusive, rules-based trade.
Malaysia’s chairmanship theme—Inclusivity and Sustainability—is being operationalised through accession facilitation, technical cooperation, and digital integration.
China’s Influence: Strategic Anchor, Sensitive Arbiter
China plays a central and complex role in RCEP—both as a founding member and as a strategic heavyweight whose influence shapes the bloc’s direction, especially in accession processes.
* As the largest economy in RCEP, China accounts for more than half of the bloc’s combined GDP and is a key driver of intra-RCEP trade, particularly in manufacturing and electronics.
* While RCEP operates on consensus, China’s economic clout and diplomatic reach give it informal sway over how accession terms are framed—especially in areas like data governance, investment protections, and dispute resolution.
* China’s support for Global South entrants like Bangladesh, Sri Lanka, and Chile aligns with its Belt and Road Initiative, but raises concerns among some members—such as Japan, Vietnam, and Australia—who seek to balance China’s influence and preserve RCEP’s multilateral integrity.
These geopolitical sensitivities will shape the tone and pace of accession talks. Malaysia’s role as moderator will be crucial in ensuring that RCEP remains a rules-based platform, not a geopolitical tool.
Bangladesh: The Most Watched Bid
Among the five applicants, Bangladesh’s bid has attracted the most attention. With over 170 million people, a booming export sector, and strategic location bridging South and Southeast Asia,
Bangladesh offers both scale and connectivity.Yet its bid also reflects a deeper frustration: the failure of South Asia’s regional architecture.
* SAARC Paralysis: India–Pakistan tensions have frozen progress, leaving smaller states like Bangladesh searching for alternatives.
* CEPA Stalled: Bilateral trade talks with India have stagnated, prompting Dhaka to look eastward.
* ASEAN Membership Unlikely: Despite diplomatic overtures, Bangladesh’s request to join ASEAN faces geographic and institutional hurdles. RCEP offers a more viable path.
Malaysia’s support for Bangladesh’s RCEP bid—while remaining cautious on ASEAN membership—demonstrates strategic balance.
Challenges Ahead: Expansion Is Not Automatic
While the approval to begin accession talks is historic, several challenges loom:
* Regulatory Alignment: New entrants must harmonise with RCEP’s rules on intellectual property, e-commerce, investment, and dispute resolution.
* Institutional Capacity: Countries like Bangladesh and Sri Lanka face domestic political transitions and limited institutional readiness.
* Geopolitical Friction: China’s role in shaping accession terms may raise concerns among smaller economies and external observers.
* Consensus Politics: RCEP operates on unanimity. Any member can delay or derail accession if strategic interests are threatened.
Malaysia’s ability to navigate these dynamics will determine whether RCEP’s expansion becomes a milestone—or a missed opportunity.
Economic Impact: RCEP’s Expanding Footprint
According to MITI Malaysia, the expanded RCEP could:
* Represent nearly 50% of global trade
* Encompass over 2.7 billion people
* Deepen integration across Asia, Latin America, and Central America
* Create new corridors for digital trade, green investment, and maritime connectivity
This expansion could reshape global trade flows, especially as Western-led pacts like CPTPP and the EU face internal fragmentation and rising protectionism.
The RCEP ministerial meeting may have been procedural, but its outcomes are historic. With five new members approved and the first Leaders’ Summit on the horizon, Malaysia stands at the centre of a trade pact that is not just expanding—but evolving. RCEP is no longer just a bloc—it is a blueprint.
(The views expressed here are entirely those of the writer, Dr Mohd Safar Hasim, a Council Member of the Malaysian Press Institute)
WE