RCEP members agree to eliminate tariffs on 65% of trade in goods
THE Commerce Ministry said last week that the 16 countries in the Regional Comprehensive Economic Partnership (RCEP) had finally agreed to eliminate tariffs on 65 per cent of trade in goods among them, creating huge benefits for all and helping to compens
The RCEP agreement is expected to be signed during the Asean leaders’ summit to be held in Malaysia in November, and enforced next year.
Commerce Minister Apiradi Tantraporn said the accomplishment of waiving tariffs for 65 per cent of trade in goods – equivalent to 8,000-9,000 items – represented the greatest start to full market liberalisation between the pact’s signatories.
The RCEP should help compensate for the potential loss arising from Thailand not yet having joined the TPP, she said.
“The RCEP is a great pact and the biggest market liberalisation, larger the than TPP as it includes China and India and covers almost half of the world’s population,” she added.
Under the agreed first step in RCEP trade liberalisation, tariffs covering 65 per of trade will be immediately cut to zero following the pact’s implementation.
In the next phase, tariffs on another 20 per cent of trade in goods will be gradually reduced to zero within 10 years, while import duties for the remaining 15 per cent will remain in place or be gradually reduced to 5-10 per cent, as those products comprise the list of sensitive goods drawn up by member states.
Apiradi said that although the waiving of tariffs would cover only 65 per cent of trade in goods in the first phase, Thailand would benefit from the pact’s collectiveness in terms of rules of origin, which would be more flexible than in other free-trade agreements since the RCEP covers Asean and six other nations: China, Japan, South Korea, India, Australia and New Zealand.
Moreover, the RCEP will continue its work with a view to liberalising service and investment sectors, and will strengthen cooperation across all dimensions, she explained.
According to a Commerce Ministry study, after the 16-member RCEP is implemented, it will be the world’s largest free-trade agreement, covering a population of 3.35 billion, or more than 50 per cent of the global total.
The 16 members’ combined gross domestic product would be worth more than US$17.1 trillion (Bt606 trillion), or 27 per cent of global GDP.
In the meantime, during the period leading to the RCEP’s enforcement, Thailand will continue to carefully consider whether to join the TPP and take part in both the world’s largest trading blocs in the future, the minister added.
Sirinart Jaimun, director-general of the ministry’s Trade Negotiations Department, said the agreement on goods tariffs reached in the RCEP talks would be reported to leaders of Asean member states and partner countries in Kuala Lumpur by the middle of next month.
Officials will also hold further talks on service and investment liberalisation under the partnership, as well as on cooperation in the economic, intellectual property, trade competition and e-commerce fields, she said.
Last year, trade among RCEP countries was valued at $260 billion, and accounted for 57 per cent of Thailand’s trading value.
Thai exports to RCEP countries were worth $127 billion – some 56 per cent of the overall shipment value of the Kingdom – while imports were worth $133 billion, or 58 per cent of overall import value.
Major exports from Thailand to RCEP markets are automobiles and parts, oil, chemical goods, plastic, rubber and rubber products, machinery and parts, iron and steel, and electronic and electrical goods.