Into the fifth round of talks on the Regional
Comprehensive Economic Partnership (RCEP), the 16 Asia-Pacific nations still cannot
agree on core issues pertaining to trade in goods and services as well as
investment.
This is
raising concerns over whether the target to conclude negotiations by the end of
next year is attainable.
As the
seven-day meeting in Singapore ended last Friday, no significant progress had
been made on tariff reductions and
elimination
modality as well as schedules of commitments both in trade in services and
investment, RCEP’s Trade Negotiation Committee (TNC) chairman Iman Pambagyo
said.
“These
issues may need to be reported to trade ministers during a meeting in August.
Further instructions on level of ambition will be necessary to achieve some
progress,” he said in a text message on Sunday.
Economic
ministers from RCEP countries — which comprise the 10 members of ASEAN plus
Australia, China, India, Japan, South Korea and New Zealand — are slated to
convene in Myanmar’s capital Naypyitaw in August.
The
trade officials will report the outcome of the Singapore meeting during that
event.
Despite
the lack of progress on key issues, the meeting made some progress, such as in
developing drafts for the agreement on trade in goods, Iman further said.
The
rounds of talks, which began in Brunei Darussalam in May last year, aim to
reach an accord that will create an integrated market across the Asia-Pacific
of around 3.4 billion people with a combined gross domestic product (GDP) of
US$21.4 trillion.
The
deal would boost income gains to roughly $644 billion by 2025, representing 0.6
percent of the world’s GDP, through the freer flow of goods, services,
investment and labor among participating economies, according to a study by the
Asian Development Bank (ADB).
Indonesia
would see an increase of 1 percent in its GDP by 2025 by implementing the deal.
That
outcome, however, would be difficult to reach, as ASEAN and the six other
trading partners may not have free trade
agreements,
said Iman, who is also the Trade Ministry’s director general for international
trade cooperation.
Australia,
for example, still does not have a free trade agreement with Japan and China.
The
absence of an agreement on tariff reduction and elimination modality, for
instance, has hampered further talks on the liberalization of goods among the
countries.
Negotiators,
however, are still sticking to next year as the target date for finishing the
talks, Iman added.
Titik
Anas, an economist from Padjadjaran University, said that to complete
negotiations would be difficult as the six nations outside ASEAN maintained
different interests, thereby a consensus would be hard to reach.
“If
negotiating members at present still cannot agree on the modality on trade in
goods, it will be hard to get the commitment in 2015,” Titik said.
“Maybe
they will only come out with a non-substantive deal,” she added, saying the
deal on trade in services would be more difficult to conclude.
RCEP
has been touted as a way for ASEAN to maintain its centrality after several
challenges were posed by the US-led Trans-Pacific Partnership (TPP), which also
includes four ASEAN members, namely Singapore, Brunei Darussalam, Vietnam and
Malaysia.
Linda
Yulisman
Business & Investment Opportunities
Saigon Business Corporation Pte Ltd (SBC) is incorporated
in Singapore since 1994.
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