Cambodia’s ASEAN economic minister said the official launch of the
negotiations for the Regional Comprehensive Economic Partnership (RCEP) will
lead to potentially forming the biggest single market in the region and is much
bigger than the traditional markets of the US and the EU.
An economist and the minister
both said Cambodia will enjoy great benefits from the trade agreement by
expanding its exporting markets to other countries in the region.
The RCEP was officially launched
on Tuesday during the 21st ASEAN Summit in Phnom Penh – of which the leaders of
the ASEAN member countries, along with the leaders of Japan, India, China,
Korea, Australia and New Zealand, issued a joint declaration to begin RCEP
negotiations in order to pave the way to boosting trade and investment under
the Free Trade Agreements (FTA).
Minister of Commerce Cham Prasidh
said in a discussion with reporters yesterday that the launch of RCEP
negotiations demonstrated the efforts of leaders to speed up the realisation of
the partnership.
“This is a great effort to build
a base which is bigger than the United State plus Europe,” said Cham Prasidh.
“We see just the total population of China, India and ASEAN is more than half
the world’s population and the economic power is also strong,” he added.
“That’s why in the ASEAN
framework, we are all trying to start negotiations on opening one more new
market which we can export to duty and quota free,” he said. “Even though we’ve
already opened one door, we are trying to seek opening a new door to ensure our
exports in the long-run,” he said.
Hiroshi Suzuki, CEO and chief
economist at the Business Research Institute for Cambodia (BRIC), said the RCEP
will substitute the current FTAs between ASEAN and each of the six countries.
Suzuki described the current
situation as being a “spaghetti bowl” because the number of bilateral FTAs have
resulted in congestion.
“The RCEP will become much more
convenient and smooth out FTAs among the 16 countries,” he said. “I would like
to express appreciation of the decision to start the negotiations,” he added.
In Suzuki’s opinion, the RCEP
will not allow as much free flow of trade as the Trans-Pacific Partnership
between the US and other Asian nations, but still has its advantages.
“The RCEP would not be so free
compared with TPP. However the effect of RCEP would be very big and positive to
strengthen the ASEAN Economic Community (AEC) and the single market among 16
countries. Now Cambodia is becoming one of the production bases in ASEAN with
the advantage of low labour costs and a good location on the Southern Economic
Corridor among the other ASEAN countries. This trend will be further
strengthened by RCEP,” he added.
Negotiations for RCEP will begin
in early 2013 and are expected to be completed by the end of 2015 alongside the
materialisation of the AEC.
According to statistics on the
ASEAN website, the RCEP could potentially transform the region into an
integrated market comprising more than three billion people with a combined GDP
of about US$19.78 trillion.
Cham Prasidh said he will set up
the taskforce and contact all member states to prepare the work.
“We believe the RCEP will
materialise and so we’re beginning to promote it, based on the guiding
principles we’ve all agreed on in terms of how to negotiate and talk to each
other about this partnership.”
May Kunmakara
Business & Investment Opportunities
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