Xinhua | May 11, 2014
RCEP negotiation in full swing amid challenges as region steps up integration
NAY PYI TAW: The fifth round of Regional Comprehensive Economic Partnership (RCEP) talks is set to commence in Singapore in June this year, barely two months after the conclusion of the fourth round in April in Nanning, China, a sign that the efforts by 16 Asian countries to create the world’s biggest free trade area are gaining momentum.
Topics on measures to overcome challenges in follow-up negotiations are also expected to be high on the agenda when leaders of the Association of Southeast Asian Nations (ASEAN) meet during its 24th summit and related meetings, which kicked off here Saturday.
Comprising 10 ASEAN member nations as well as China, South Korea, Japan, India, Australia and New Zealand, the RCEP aims to integrate all of ASEAN’s existing free-trade agreements into one scheme. When materialized, it would account for over 30 percent of the world’s gross domestic product (GDP) and cover about 45 percent of the global population.
Though the intra-region trade in Asia has almost tripled to some 3 trillion U.S. dollars from 1 trillion dollars over the last decade, it is still lagging behind if compared to the European Union.
Chinese Premier Li Keqiang said at the recent Boao Forum for Asia Annual Conference 2014 that regional economic integration meets the interests of all Asian countries. “We need to work in unison to promote trade liberalization and investment facilitation, and upgrade regional and sub-regional cooperation,”the premier said, adding that China will work with all other parties to accelerate the RCEP negotiating process.
The RCEP was first proposed by ASEAN as the regional grouping struggled to entrench its centrality in promoting cooperation with East Asian nations at a time when a U.S.-led Trans-Pacific Partnership (TPP) free trade scheme was gearing up.
TPP requires much deeper economic liberalization from its members and contains provisions to protect labor rights, environment and intellectual property, reform state-owned enterprises and boldly eliminate tariffs.
By contrast, the RCEP appears to be more inclusive and flexible as it was designed to cater to diverse circumstances and development gaps within ASEAN and between ASEAN and its FTA partners. This makes it more attractive to less-developed countries and ensures wider membership.
While anticipated to greatly promote regional cooperation and integration, the RCEP is estimated to give income gains of approximately 644 billion U.S. dollars by 2025, or 0.6 percent of the world’s GDP, according to a study by the Asian Development Bank.
The RCEP free trade talks are scheduled for completion in 2015 when agreements will be finalized before being implemented in the following years.
Since the first round of talks was held in Brunei in May 2013, there have been four rounds of negotiations so far. In the first three rounds of talks, participating countries reached preliminary consensus in the areas of tariff concessions, rules of origin, customs procedures and trade facilitation, among others. In the latest round of negotiation, progress was made on a range of issues including goods, service, investment and agreement framework.