World Economy

RCEP Closer to FTA Finalization

A joint statement says few chapters are close to being finalized, however, tall hurdles remain
A group picture of ministers from the 16 participating countries who attended the  4th RCEP Intersessional Ministerial Meeting held in Singapore on March 3.A group picture of ministers from the 16 participating countries who attended the  4th RCEP Intersessional Ministerial Meeting held in Singapore on March 3.

Ministers from 16 East Asian countries negotiating the Regional Comprehensive Economic Partnership made progress at a meeting in Singapore Saturday but many gaps remain.

“There is still a lot to do but it’s possible to finish by this year,” said a high-ranking official from the Association of Southeast Asian Nations who took part in the one-day RCEP meeting, Kyodo reported.

Minister of Economy, Trade and Industry Hiroshige Seko expressed Japan’s intention to support ASEAN’s policy of sealing an RCEP deal this year. At a news conference after the 4th RCEP Intersessional Ministerial Meeting, Seko said Japan’s push to reach a conclusion this year is based on the premise that a certain degree of market access will be guaranteed.

The joint RCEP statement issued after the meeting said the ministers “reaffirmed their resolve to meet their leaders’ instruction to intensify efforts in 2018 toward the conclusion.”

But it added that the negotiators noted “divergence on the levels of ambition in some areas and tasked negotiators to work out creative, innovative and pragmatic landing zones.”

The meeting pushed the regional free trade deal closer to a conclusion, which the Association of Southeast Asian Nations and some other members hope to reach by the end of the year.

In addition to a chapter on economic and technological cooperation as well as another on small and midsize companies, a few other chapters are also close to being finalized, according to the joint statement.

However, tall hurdles remain. While some participants like Japan and Australia seek high standards, India and others are wary of opening up their economies to a large degree.

"As to the different parts of the negotiations," said Lim Hng Kiang, Singapore's minister for trade and industry, "there are different levels of ambition and different sensitivities."

Request for Revised Offers

The negotiating parties were asked to improve their offers for market access and submit revisions by April 13. They will also have to table a revised offer for services and investment, but no deadline was set for that.

A ministerial meeting will be held sometime in July this year before the ASEAN economic ministers’ meeting in August. There will also be two meetings of RCEP chief negotiators in April and June.

The ministers discussed a number of issues requiring more work, including competition, intellectual property rights and rules of origin. “Everybody is working toward substantial conclusion this year,” said the ASEAN source, adding that there is political will to see movement in the RCEP negotiations.

“There is no deadline” to ink a deal by the end of this year, the source said. “But we are all trying to see if we can make progress and get substantial conclusion by end of this year.”

A second source said he is expecting the ministers to make a political decision on some of the obstacles in the negotiations.

On the different levels of ambition, “some of us could not reach that goalpost. Some would like to have high ambition. Let’s negotiate rather than setting a goalpost which is too high.”

Bilateral or multilateral negotiations are being conducted to overcome some of the impasses, he said.

Gaps Remain

Indonesia's Ministry of International Trade and Industry Secretary-General J. Jayasiri said: “The negotiators last met in Yogjakarta. Some progress was made there but there are still gaps in many of the issues,” he told Bernama after the meeting.

Jayasiri expressed hope that there would be further progress during the next two official meetings. “And that needs political decisions. Everybody is working towards substantial conclusion this year. There is political will to see movement in the RCEP negotiations,” he said.

By April 13, Jayasiri said, all negotiating parties would table a revised offer for trade in goods. “And based on those revised offers, there will be requests and offers to improve the package. It is similar for the services and investment but there are no datelines,” he said.

RCEP is a proposed free trade agreement between the ten member states of the ASEAN (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam) and the six states with which ASEAN has existing free trade agreements (Australia, China, India, Japan, South Korea and New Zealand).

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