TRICKY TASK
Trade negotiators face pressure to make progress on the blockbuster RCEP pact.
JAKARTA/TOKYO: Trade negotiators are under pressure this week to make progress on a blockbuster Asia pact, after Donald Trump pulled the United States out of a rival Pacific agreement. But officials meeting in Japan face some significant sticking points.
China is championing the 16-nation Regional Comprehensive Economic Partnership, which does not include the US or Canada. It’s a chance for it to seize the moment amid the US president’s protectionism — evidenced by his withdrawal from the 12-country Trans-Pacific Partnership — keeping free trade on track and boosting its global clout.
Still, some nations are uneasy about rushing to get the RCEP done, even with the failure of the TPP. And while the talks should be simpler — the RCEP is more of a traditional trade deal — there are disputes over tariff cuts and the service sector.
“The stumbling blocks are multiple,” according to Iman Pambagyo, the RCEP trade negotiating committee chief.
Pambagyo, who is director-general of international negotiations with Indonesia’s Trade Ministry, said negotiators had only agreed on about 700 of more than 5,000 tariff lines covered in the deal.
The RCEP could help develop supply chains i n Asia, according to Japan’s State Minister for Foreign Affairs Kentaro Sonoura.
“This is the first meeting of the year,” he said. “I have strong expectations of progress towards the early conclusion of a high-quality agreement.”
“Still, the Japan meeting may only take officials about 30% of the way to a deal,’’ said an official involved in the talks.
“Some countries want to offer different degrees of market access to member nations, but that is not an approach with universal support,’’ said the official, who asked not to be identified.
“For the RCEP, it depends whether they prioritise speed over quality,” said Yorizumi Watanabe, a former trade negotiator with Japan’s Foreign Ministry, now a professor at Keio University.
“It’s possible RCEP could take over from TPP as the model for future agreements. But if they try to rush, it might be thin.”
The shadow of the TPP will hang over the Kobe meetings. While China pushes the RCEP, some TPP members are calling for that pact to be revived: By proceeding without the US, or waiting for Trump to change his mind.
Australia insists the TPP can continue without the US and will seek support for that view in ministerial talks next month in Chile.
A spokesperson for Trade Minister Steven Ciobo said negotiations on the RCEP “are challenging and significant work remains on market access.’’
“The seven countries in both the TPP and RCEP are busy scrambling to figure out what to do about TPP with the US withdrawal,” said Deborah Elms, executive director of the Asian Trade Centre, a Singapore-based consultancy.
“If TPP does not move forward, it is possible that many TPP provisions will be moved across into RCEP by some members.”
The RCEP was conceived as an expansion of Southeast Asian trade ties with China, India, Australia and Japan. It includes New Zealand and South Korea, which already have free trade pacts with the Association of Southeast Asian Nations (Asean). It would cover almost half the world’s population and 30% of the global economy.
Asean members “now see RCEP coming into play,” according to Rebecca Fatima Sta Maria, senior policy fellow at the Jakartabased Economic Research Institute for Asean and East Asia (ERIA).
She said there must be a clear timetable and agreement reached in the Kobe meeting on what aspects must be in for it to be substantially concluded, if the RCEP has any hope of being ratified this year.
“There has to be political will. I think from a political will perspective, I think there is that will.”
The RCEP covers investment, intellectual property and economic and technical cooperation. It would introduce disputeresolution mechanisms.
Unlike the TPP it would not require members to protect labour rights or improve environmental standards.