RCEP negotiators working to tackle unresolved issues
Representatives from 16 nations are meeting on the Indonesian island of Bali to try to resolve the last remaining obstacles to the Regional Comprehensive Economic Partnership, a free-trade pact that would cover almost half of the world’s population.
The meeting, which started on Tuesday, is to conclude on Feb 28. Delegates hope to reach agreement on remaining “sticking points” to pave the way to a final agreement on the RCEP.
The Japanese Foreign Ministry said in a statement that it hopes to achieve progress on financial services and other less contentious areas while intellectual property and IT transfers remain as unresolved issues.
Rajiv Biswas, chief economist for Asia Pacific at London-based information provider IHS Markit, said negotiators are under intense pressure.
“Leaders of RCEP nations are pressing their negotiators to conclude a trade deal by the end of 2019. However, there are still significant differences on key aspects between the (Asia-Pacific) nations at the negotiating table,” he said.
Tim Harcourt, JW Nevile fellow in economics at the University of New South Wales, said there could be an agreement this year, despite ongoing trade frictions among major global economies.
Ministers from the 16 RCEP nations met five times last year but failed to reach agreement on several key issues including tariffs, financial services and intellectual property.
Harcourt, however, said these are issues that “can be overcome”.
The RCEP brings together all 10 members of the Association of Southeast Asian Nations — Indonesia, Thailand, Malaysia, Singapore, Philippines, Vietnam, Cambodia, Myanmar, Brunei and Laos — and six ASEAN free-trade partners — China, Australia, India, Japan, the Republic of Korea and New Zealand.
The idea of the RCEP was initially endorsed by ASEAN leaders in November 2011 and in the following year ASEAN invited its six FTA partners to join the trade bloc. The RCEP nations had a combined gross domestic product last year in excess of $25 trillion.
Peter Drysdale, emeritus professor of economics at the Crawford School of Public Policy at the Australian National University in Canberra, said the 16 countries “do appear to be on the cusp of settling core elements of the (RCEP) agreement”.
“This is significant because there’s been growing understanding of the strategic importance of RCEP to ASEAN strategic interests in the face of uncertainties about the global trading system,” he said.
The RCEP is important now because “it is seen as a key element in responding to the big geopolitical and economic challenges of the day”, Drysdale said.
“RCEP may take some months to finalize yet — until after the run of elections in India, Indonesia and Australia — but it’s looking like it might now happen sooner than later.”