THAILAND is determined to help bring about an agreement by the end of next year for the Regional Comprehensive Economic Partnership (RCEP) to proceed as a counterbalance to the impact of the trade war between the US and China.
“The RCEP negotiations will be the key focus for 2019. Thailand will capitalise on its position as the chair the upcoming Asean summits to finish off the negotiations before the end of next year,” said Auramon Supthaweethum, director-general of the Department of Trade Negotiations,
Auramon was speaking yesterday at an event entitled Knowing Asean Understanding RCEP, co-organised by the department, which comes under the Ministry of Commerce, and Jetro Bangkok.
If negotiations are successful, the RCEP will be the largest multilateral trade pact in history – encompassing China, India, Japan, South Korea, Australia, New Zealand and the 10 Asean nations. The details of the trade agreement are yet to be concluded, but the primary focus is expected to be the lowering of trade barriers on goods. The combined gross domestic product of all the prospective RCEP members accounts for up to 28 per cent of global GDP, said Auramon, adding that the trade value of the RCEP nations amounts to as much as 30 per cent of world trade.
“For Thailand, as an exporting nation, the RCEP is an extremely important trading bloc. Currently, up to 60 per cent of Thailand’s total exports go to RCEP members.”
All prospective members of RCEP agree that it is important to conclude the negotiations before the end of this year, the trade official said. This is because every member recognises the importance of lifting trade barriers in a global trading environment that is growing more volatile and unstable, according to Auramon, citing the trade war between the economic superpowers as the key risk factor.
“Joining RCEP will allow Thailand to benefit greatly from free trade. This will, in turn, help us counterbalance the negative impacts of the US-China trade war, which is growing more and more unpredictable,” she said.
There will be up to four Trade Negotiation Committee (TNC) meetings between the prospective RCEP members in 2019 to discuss the details of the mega-trade pact. The details concerning the host nation and the date of the meetings are yet to be decided. However, Auramon said that Thailand is fully ready to host one of the upcoming TNC meetings.
The RCEP negotiations will cover 20 chapters of an agreement document, seven of which have been completed. Thailand aims to swiftly guide the talks for the completion of the remaining 13 chapters by the end of next year, Auramon said.
She said the department is confident that the new government after the February election will fully back Thailand’s plan to finish the RCEP negotiations before the end of next year.
“The benefits of joining a trade pact at this scale are clear. We are not worried that the new government will shift our current focus away from finishing the trade negotiations and positioning ourselves at the centre of RCEP,” she said.
Meanwhile, she said that a date for Thailand’s entry into he Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is indefinite, although the country fully intends to join the trade pact that currently consists of 11 countries, including Japan, Malaysia, Singapore and Vietnam.
“We are not deciding between joining the RCEP and joining the CPTPP as we see the benefits from joining both trade pacts, and look forward to making progress on both sides,” Auramon said. “However, we have more to clarity and more information on the progress of RCEP as we are in the inner circle and are leading the charge to finish the trade negotiations.”
One of the key challenges for joining the CPTPP involves the need to adjust certain regulations within Thailand, Auramon said. She identified one such area as changing government procurement bidding laws to allow for foreign firms to compete if the procurement reaches a certain value.
“All in all, joining RCEP is in line with the current government’s theme of ‘Advancing Partnerships for Sustainability’ for the Asean summits,” she said. “We will use our position as the chair of the coming year’s summits to advance the negotiations and aim to complete them by the end of next year.”