SUPACHAI PANITCHPAKDI, former director general of the World Trade Organisation (WTO), has called for Asian free-trade negotiations under the so-called Regional Comprehensive Economic Partnership (RCEP) to be wrapped up by the end of the year – and strike a blow for global trade amid rising protectionism fuelled by isolationist US policies.
The RCEP comprises 16 countries, including the 10 Asean members and China and India, with a total population of 3.5 billion.
Supachai, who is a also a former secretary general of United Nations Conference on Trade and Investment, warned that Asean cannot rely solely on government efforts to stimulate domestic demand as this would not be sustainable.
“Domestic demand is not enough. Asean needs the benefits of international trade,” he said yesterday at the Boao Forum for Asia Bangkok Conference.
An agreement for RCEP has been delayed due to wrangling with India over agricultural market access; the South Asian giant wants to protect its domestic market.
India wants to create a food inventory for the poor, but others contend that such a practice amounts to an agricultural subsidy that may be unfair to trade partners.
However, Supachai expressed his sympathies with the Indian position, saying that the country had to look after 600 million people living below the poverty line. “We should be flexible in allowing India some leeway in the agricultural sector but we should push India to open up other sectors instead,” he said.
He suggested that other countries should seek to understand India’s political difficulties regarding to agricultural sector.
The RCEP is expected to give a big boost to Thailand's proposed Eastern Economic Corridor project as well as strengthen multilateral trade arrangements under the WTO, Supachai said.
Call on China
The RCEP covers not only trade but consumer protection and investment promotion.
He also urged China to take an active role in bringing the RCEP negotiations to a conclusion as a deal would also benefit Beijing’s One Belt, One Road (OBOR) initiative aimed a spurring infrastructure development across the region and beyond.
Sok Siphana, an adviser to the Cambodian government, shares Supachai’s sense of urgency. The finalisation of an RCEP agreement should coincide with celebrations for the 50th anniversary of Asean, Sok Siphana said. “The RCEP would send a strong message to the world and sustain the momentum for regional free trade,” the adviser said.
Michael Yeoh, the chief executive officer of the Asian Strategy and Leadership Institute, chimed in with this view, declaring that globalisation is not dead and that its positive sides should be better communicated to the world.
He also called for China to push for a global free-trade agenda.
However, Chen Deming, a former Chinese commerce minister, expressed caution on the prospects for the RCEP due the disparity in development levels among the members states. Reaching a comprehensive free-trade agreement among East Asian countries would be an easier task, he said. He pointed out that in a new round of talks for a free trade agreement between Asean and China only two countries remained opposed to it.
Chen called for Asean countries to open up their transport and energy sectors, describing such moves as essential for connectivity and deeper economic integration.
He cited the Ming Dynasty’s closure of China’s seaports and overseas trade – which led to imperial China’s stagnation as an economic power – as an example of the consequences of isolationism.
In contrast, he said the ancient Silk Road had brought prosperity to China. That positive example of trade was being replicated in the OBOR scheme, under China would build a high-speed train service to Thailand and other Asean countries, among other initiatives, Chen said.