PLAYING CATCH-UP
Thailand proposes hosting next meeting
Thailand proposes to host the next RCEP meeting as Asean members rev up efforts to wrap up talks after TPP pact conclusion.
NAIROBI: Asean members are stepping up efforts to wrap up talks over the Regional Comprehensive Economic Partnership (RCEP) after 12 Pacific-Rim countries led by the US concluded the Trans-Pacific Partnership (TPP) trade agreement on Oct 5.
Commerce vice-minister Winichai Chaemchaeng said an informal meeting among Asean economic ministers held on the sidelines of the 10th WTO Ministerial Conference in Nairobi discussed plans to expedite the conclusion of agreements under the RCEP by next year.
The RCEP meeting was held as a followup to a decision made by Asean leaders during their summit held last month in Kuala Lumpur.
“The TPP has become the key driver for all Asean members to speed up talks and wrap up the agreements to cushion the impact of the pact,” Mr Winichai said.
“Thailand has proposed hosting the RCEP ministerial meeting in Chiang Mai from March 2-3 to set the agenda ahead of the Asean Summit in Laos late next year.”
RCEP negotiations were formally launched in November 2012 at the Asean Summit in Cambodia, with the aim of establishing deeper economic cooperation between the 10 Asean members and Australia, China, India, Japan, New Zealand and South Korea, focusing on trade in goods, services and investment.
Members have already organised 10 rounds of talks, with the next round to be held in Brunei in February next year.
Mr Winichai said members expected five more rounds of talks before a conclusion could be reached.
“The negotiations are moving very fast right now as China itself has become more flexible, while other countries need to finish the talks as soon as possible due to the mounting pressure from the conclusion of the TPP.”
TPP countries encompass 40% of global trade or US$295 trillion a year, with a combined GDP of $28.3 trillion, representing 38% of the world’s GDP. The combined population of TPP countries is roughly 800 million or 11% of the world’s population.
In comparison, the RCEP’s 16 member countries represent 29% of global trade or $10.7 trillion, with a combined GDP of $21.2 trillion or 28% of the world’s GDP.
The RCEP’s population numbers 3.4 billion, making up half the world’s population.
Thailand’s exports to RCEP countries reached $127 billion in 2014, representing 56% of total export value. Imports totalled $133 billion or 58% of total imports.
RCEP members accounted for 70% of foreign direct investment (FDI) in Thailand last year.
Meanwhile, Thai shipments to TPP countries were valued at $92 billion, representing 40.4% of total exports. Imports amounted to $83.4 billion or 36.6% of total imports.
Last year, TPP members represented 45% of Thailand’s FDI.
Mr Winichai said the industries that will benefit from the RCEP include automotives and auto parts as well as electronics.
The 16 members of the RCEP tentatively agreed in October to eliminate tariffs on 65% of all goods, amounting to 8,000-9,000 items, under the RCEP plans.
Regarding t he 35% of 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 the remaining 15% of products, which are mostly sensitive items.
In a related development, Thailand and Pakistan agreed to rev up their bilateral free trade agreement (FTA) talks and wrap up negotiations next year. The first round of formal FTA talks were held in Bangkok in September.
Thailand hopes to not only boost trade with Pakistan but also use the country as the gateway to western China, Central Asia and the Middle East, particularly for Muslim consumers.
The next round of talks is scheduled for Jan 25-27 in Islamabad.
Bilateral trade between the two has steadily increased over the last five years, with average growth of 7.02% a year. Last year, bilateral trade amounted to $1.02 billion.