The 50th Association of Southeast Asian Nation Economic Ministers' Meeting and Related Meetings ended in Singapore Saturday, with agreements reached between ASEAN member states and its dialogue partners to enhance trade relations.
The ASEAN ministers met in consultations with nine of ASEAN's dialogue partners, namely Australia, Canada, China, India, Japan, South Korea, New Zealand, Russia and the United States, Xinhua reported.
Chaired by Singapore's Minister for Trade and Industry Chan Chun Sing, the meetings saw good progress in deepening and widening economic cooperation between ASEAN and its dialogue partners, according to a press release issued late Saturday by the Ministry of Trade and Industry of Singapore, which assumes the rotating chairmanship of ASEAN this year.
The ASEAN countries reaffirmed their support for free trade as uncertainties in the global trade environment threaten to hurt exports, which they see as crucial to their economic growth.
ASEAN economic ministers agreed to strengthen individual free trade agreements on top of the broader Regional Comprehensive Economic Partnership trade pact it is seeking to sign, to ensure that barriers to trade will be brought down.
"ASEAN countries and RCEP countries all believe in a multilateral system, a rule-based system," Chan told reporters at the conclusion of the meeting. "We believe that this is the best way to overcome many of the challenges that we are facing in a current global economic environment," he said.
One achievement of this weekend's talks was a commitment to deepen the ASEAN-China FTA. By January, the two sides will revise product-specific rules in line with the facts on the ground with a goal of further boosting trade, Nikkei reported.
The bloc also wrapped up a joint feasibility study toward an FTA with Canada. Meanwhile, the FTAs with Australia and New Zealand are set to be updated and improved.
The renewed focus on bilateral FTAs come as the bloc attempts to reach a "substantial conclusion" by year-end on the RCEP, a massive free trade pact that comprises the 10 ASEAN countries plus the nine dialogue partners.
While Singapore's Chan said that "broad agreement is in sight" regarding the RCEP and that members intend to strike a deal around the time of November's ASEAN summit meetings, there are fears that obstacles will arise in the final stretch.
Need for Compromises
RCEP negotiations have been going on for five years now, and members will need to make significant compromises for the pact to be considered "concluded" by the end of 2018.
If the RCEP's free trade provisions were weaker than those guaranteed by existing FTAs, the pact would have little significance. ASEAN already has individual FTAs with the six other RCEP members, and upgrading the provisions of those FTAs are seen as laying the groundwork for the broader pact.
It is "more challenging" for countries without bilateral FTAs to negotiate tariffs from scratch in the RCEP discussions, Chan noted. Whether countries like India and China, with no such existing trade pact to serve as a foundation for negotiations, can come together is seen as a key to sealing the deal.
"We must ensure that we continue to build up our links with more countries to diversify our reliance on any one particular market, so that our businesses will not face discontinuity even if there's a disruption in one particular market," Chan said.
ASEAN continues to lower trade barriers within its region, which encompasses more than 20% of global trade. Members have removed 98.6% of internal tariffs, up from 96.01% a year earlier, with laggards like Cambodia, Laos, Myanmar and Vietnam now becoming more open. The bloc aims to further its economic integration by removing nontariff barriers as well.
Earlier this year, seven of the 16 RCEP members also signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, another trade framework also known as the TPP-11. That has spurred the RCEP talks along.
However, RCEP will face hurdles in the next few months. Rules governing 14 of the 18 areas under discussion—including trade in goods, competition, investment, intellectual property and e-commerce—have yet to be agreed. And there are major differences among members. India, for example, appears reluctant to open its market to large countries such as China.
The members also have different ideas regarding how strict the rules should be. More developed members prefer demanding standards.
"Given the diversity of RCEP's members, we all have to make trade-offs and compromises," Singapore's Prime Minister Lee Hsien Loong said Wednesday.
