A mega trade deal that would have linked around 30 percent of the global economy failed to find a substantial conclusion this year.
Some countries behind the proposed Regional Comprehensive Economic Partnership (RCEP) still could not agree on some contentious issues even after 20 rounds of negotiations held within the year.
According to Trade Undersecretary Ceferino Rodolfo, the problem was not with the Association of Southeast Asian Nations (Asean), but with some of the bloc’s FTA partners, which he declined to identify.
In a press briefing yesterday, Rodolfo read the prepared speech of Asean Economic Ministers (AEM) Chair Ramon Lopez, who is also trade and industry secretary of the Philippines. In the speech, Lopez said that reaching a substantial conclusion remained to be the goal.
This, however, might not come this year when the Philippines is hosting as chair of the Asean for its 50th Anniversary.
“The substantial conclusion of [RCEP] remains a work in progress,” Lopez said.
Half a decade has passed since RCEP negotiations began among Asean member states and six FTA partners—Australia, New Zealand, India, Korea, Japan and China.
Nevertheless, Lopez said that that there was still “significant progress” in the talks, citing the finalization of the scope of the deal under the RCEP Key Elements for Significant Outcomes by end of 2017 and the Collective Assessment Report.
The “Key Elements” document outlines the position of the parties involved. The assessment report, on the other hand, reviewed the progress of the discussions, including their hits and misses. Copies of both documents were not shared to the press.
“In view of the large potential of the RCEP to promote global trade and growth, we will remain deeply committed to swiftly and successfully achieving a modern, comprehensive, high-quality and mutually beneficial RCEP agreement that will redound to increased job generation, and sustainable, inclusive and innovation-oriented growth,” Lopez said.
In numerous occasions this year, Lopez reiterated that a substantial conclusion of the deal would be one of the priority deliverables of the Philippines as Asean chair. In September, he even called on other countries to have “more realistic ambitions” as talks remained contentious.
Despite this, the first ever RCEP Summit was held in Manila yesterday, which Lopez said sent a “strong signal” of continuing cooperation for common areas of interest “contrary to growing prominence of protectionism and anti-globalization sentiments worldwide.”
In an interview, Rodolfo, who serves as the Philippine lead for the AEM, explained that there were issues among FTA partners that kept talks from further progressing.
“With the RCEP, we can see that developed countries are willing to open their markets to sectors of interest to Asean. The problem here is really among them, and we’re just being affected,” he said in a mix of English and Filipino.
Further details of the trade talks have been kept secret, but Lopez previously said the Asean found it difficult to reach an agreement with some FTA partners regarding the extent of liberalization in the trade in goods. He said the Asean would not accept an offer higher or lower than 92 percent.
Singapore, which would assume chairmanship of the Asean next year, would now have the chance of announcing the talks’ substantial conclusion under its term.
A substantial conclusion, however, does not mean that a trade deal would be signed already, according to Lopez in a previous interview. He clarified that this could mean that there would be a consensus on the basic framework of RCEP.
According to the Asean website, the objective of RCEP negotiations was to have a “modern, comprehensive, high-quality, and mutually beneficial economic partnership agreement.”
In other words, this means that the RCEP has the potential to deliver “significant opportunities” for businesses in East Asia —including small- and medium- sized enterprises (SMEs)—since they would gain better market access to the 16 countries involved, which collectively account for close to half of the world’s population.
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