OFFICIALS FROM 16 countries, including Asean and its six trading partners, will try to conclude the modalities for liberalisation in the trade of goods by the middle of this year to pave the way for the creation of the Regional Comprehensive Economic Partnership (RCEP), the world’s largest free-trade bloc.
Commerce Minister Apiradi Tantraporn said the decision of the United States to leave the Trans-Pacific Partnership will let the RCEP play a more important role in global trading, as the free-trade pact will cover more than half of the world’s population.
“Without TPP, Thailand and Asean countries realise that the RCEP will be more important, so Asean as well as its six economic partners will accelerate wrapping |up modalities in the trade of |goods. There may not be a 100-|per-cent waiver but the list may cover more than 80 per cent of items to ensure that the world’s biggest FTA can be finalised soon,” Apiradi said.
Officials from RCEP member states – the 10 Asean countries plus China, Japan, South Korea, India, Australia, and New Zealand – will meet from February 22 to March 3 to speed up discussions on many issues.
The discussion will focus on tariff modality reduction for all 16 members. However, there were still some difficulties as some RCEP member countries did not have bilateral trade agreements such as China-Japan, India-China, China-Korea, India-Australia, India-New Zealand.
Apiradi said that once the trade modalities were concluded at the official level, it would make the talks for the pact easier and increase the chances of finalising the RCEP agreement, as negotiations on other issues are not that complicated.
After the negotiations involving officials, a ministerial level meeting will be held in Vietnam to further negotiate in the middle of this year, after which the agreement will be proposed at the leaders’ summit late this year.
Besides economic cooperation, the RCEP countries will also discuss intellectual property rights, competition, and electronic commerce.
Apiradi said that RCEP should liberalise more than under the Asean agreement, because if it was less than under other FTAs, RCEP would not be competitive with the TPP.
If the 16-member RCEP is achieved, it will be the world’s largest free-trade agreement, with a population of 3.35 billion, or more than 50 per cent of the world population. The combined GDP would be worth more than US$17.1 trillion (Bt538 trillion), or 27 per cent of global GDP.
As of 2014, Thailand’s total trading value with RCEP countries was worth US$2.6 trillion, accounting for 57 per cent of the Kingdom’s total trading value. Thai exports to RCEP were valued at $1.27 trillion, or 56 per cent of total export value, while imports were worth $1.33 trillion, accounting for 58 per cent of total imports.
Aat Pisanwanich, director at the Centre for International Trade Studies, said although the TPP was in limbo, Thailand should not only focus on RCEP as the US and other markets still play an important role in Thailand’s trade and investment.
Thailand could consider renegotiating its free-trade pact with the US but it should be careful to ensure fair benefit to both sides.