CONCLUDING the negotiations for the Regional Comprehensive Economic Partnership (RCEP) presents the biggest challenge to Thailand as this year’s Asean chair, trade officials said, as little tangible progress has been made in the talks so far.
Meanwhile, good headway has been made in the development of the Asean Single Window to improve the flow of goods within the region.
The 25th Asean Economic Ministers’ Retreat (AEMR) kicked off yesterday in Phuket, where trade officials from the 10 Asean members are meeting to discuss issues surrounding economic integration in the region. Thailand has set conclusion of the RCEP negotiations in 2019 as one of its 13 economic deliverables as Asean chair.
“The conclusion of the RCEP negotiations by the end of this year is the most important and challenging issue. It will be at the centre of discussions during the AEMR meeting,” acting commerce minister Chutima Bunyapraphasara said yesterday.
RCEP is a 16-country mega-trade pact encompassing 10 Asean nations as well as India, China, Japan, South Korea, Australia and New Zealand. Negotiations have been going on for seven years, and seven out of the 20 chapters in the RCEP negotiations have been completed, leaving Thailand with the challenge of completing 13 chapters in one year.
If the negotiations are successful, RCEP will be the largest multilateral trade pact in history. The combined gross domestic product of RCEP members accounts for up to 28 per cent of global GDP and as much as 30 per cent of the value of world trade.
In 2018, the trade value between Thailand and the RCEP countries was worth some US$70 billion. Thailand’s exports to RCEP countries currently account for 58 per cent of the Kingdom’s total exports, according to data from the Commerce Ministry.
After the AEMR, Asean senior officials will meet for at least three more times through the rest of 2019 to conclude the negotiations by November.
“Our negotiation strategy is to first make sure that Asean members have a common position on the different chapters of the RCEP negotiations,” Chutima told reporters. “This will be the key goal of the AEMR and the following RCEP meetings.”
When Asean members stand on common ground, the 10 Asean countries can then start to push the remaining six members of the RCEP to come to a compromise on the current outstanding issues as a bloc, she explained.
“All Asean members have stated that they would like to see Thailand conclude the RCEP negotiations by the end of this year, as all Asean members recognise the importance of further economic integration amid uncertain global trade conditions,” Chutima stated.
Currently, there are a few issues on which Asean members have yet to establish a common position, she said.
For example, when exempting tariff on goods traded between RCEP countries, some Asean members have different views on the rules of origin of goods in sectors such as petrochemicals and fabrics.
Members who are key producers may want the rules of origin to require that a higher percentage of their export components be produced within the exporting country, she explained.
Meanwhile, local politics in various RCEP countries may also present a temporary challenge to the RCEP negotiations.
“The RCEP negotiations have been delayed by elections happening in the region,” said Auramon Supthaweethum, director-general of the Commerce Ministry’s Department of Trade Negotiations.
Thailand and Indonesia held general elections in March and April respectively. Furthermore, the Indian general election is currently being held in seven phases from April 11 to May 19. These elections may cause many members of RCEP to wait to negotiate with the newly elected governments after the elections.
Another key economic goal for 2019 is the completion of the Asean Single Window (ASW).
The ASW aims to integrate the different national single-window systems of the Asean countries in order to expedite cargo clearance and boost cross-border trade by enabling the electronic exchange of trade-related documents among Asean members.
Since 2018, five Asean countries – Thailand, Vietnam, Singapore, Malaysia and Indonesia – have launched the ASW, leaving Thailand the task of facilitating the development of the ASW for Cambodia, Philippines, Brunei, Laos and Myanmar in 2019.
Cambodia, Philippines and Brunei have been in the testing stage of the ASW since the beginning of this year, and recently Brunei confirmed that it can fully adopt the ASW, bringing the number of Asean members using the single-window clearance system to six, said Auramon.
“Furthermore, Myanmar and Laos have also informed us that they are confident that they will be able to join the ASW by the end of this year,” she claimed. “Currently, the prospects of all 10 members Asean members completing the ASW by the end of this year is bright.”