Full steam ahead for RCEP trade deal

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The Bangkok Post | 26 October 2015

Full steam ahead for RCEP trade deal

by Phusadee Arunmas

The conclusion of the Trans-Pacific Partnership (TPP) trade agreement with 12 Pacific Rim countries early this month has sped up talks over the China-led Regional Comprehensive Economic Partnership (RCEP).

Sixteen members have tentatively agreed to eliminate tariffs on 65% of all goods, amounting to 8,000-9,000 items, under the RCEP plans.

Commerce Minister Apiradi Tantraporn said the agreement was reached at the 10th meeting of negotiating teams from Oct 12-16 in Busan, South Korea.

It will be submitted to the Asean Summit next month in Kuala Lumpur, with enforcement due in 2017.

Of the 35% of total products not included in the initial agreement, RCEP members are expected to gradually cut tariffs to zero within 10 years after 2017 for 20%, while further talks are needed for for the other 15% of products, which are mostly sensitive items, Mrs Apiradi said.

The RCEP was launched in November 2012 with the aim of establishing deeper economic cooperation between the 10 Asean members and Australia, China, India, Japan, New Zealand and South Korea, with a focus...

If signed, the agreement will create an economic bloc with a combined population of 3.5 billion and trade volume of UScopy0.7 billion, accounting for nearly 30% of the world’s trade.

China has been seen as the key driver of the regional trade pact, which is viewed as an alternative to the US-led TPP from which the world’s second-biggest economy was excluded.

Within the RCEP, seven countries — Australia, Japan, Malaysia, New Zealand, Singapore, Vietnam and Brunei — are part of the 12-nation TPP.

Thailand exported goods worth copy27 billion to RCEP countries in 2014, making up 56% of export value. Key exports were cars and auto parts, plastic pellets, chemicals, computers and parts, and rubber products. Imports mainly for machinery and parts, steel and steel products, crude oil and integrated circuits totalled copy33 billion, representing 58% of Thailand’s import value.

Thailand’s imports from RCEP members amounted to copy33 billion or 58% of import value.

Direct investment from RCEP members totalled 280 billion baht in 2014, making up 70% of foreign direct investment.

The figures indicate that more than half of Thailand’s trade and investment relies on the sheer size of the RCEP market.

"Compared with the TPP, the RCEP sounds much more interesting, as the latter contains China and India, each with a population of more than 1 billion," Mrs Apiradi said.

"Although Thailand hasn’t joined the TPP, the impact is yet unclear as details of the pact have not yet been fully disclosed."

Although Thailand has yet to make a decision on whether to join the TPP, it remains curious about joining and is studying the pros and cons of the pact, she said.

The Commerce Ministry has studied the feasibility of joining the TPP, particularly over the intellectual property issue.

The ministry has hired the Panyapiwat Institute of Technology to study what effect joining the TPP would have on Thailand, particularly for controversial sectors such as intellectual property, information...

The ministry will soon call a joint meeting with relevant parties in the private and public sectors to evaluate the TPP’s potential effect.

However, Mrs Apiradi was non-committal about a time frame for Thailand to join the TPP, saying only that authorities must carefully consider the pros and cons to prevent any adverse effects.

Prime Minister Prayut Chan-o-cha reiterated last week that Thailand had yet to make a decision on whether to join the TPP, saying it still had a year or two to reconsider whether to join the pact because members were expected to take time to discuss details.

"The new study is needed because the latest TPP agreement has changed details such as the data exclusivity issue for medicines, which cuts the protection period to five to eight years from 12," said Mrs Apiradi. "Closer talks with concerned parties are also needed."

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