What is it?
The RCEP is a proposed free trade agreement (FTA) between the ten member states of the Association of Southeast Asian Nations (ASEAN) (Brunei, Myanmar, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam), and the six countries with which ASEAN already has FTAs (Australia, China, India, Japan, South Korea and New Zealand).
What are the Objectives and Scope of RCEP Negotiations?
The RCEP aims to cover trade in goods, trade in services, investment, economic and technical co-operation, intellectual property, competition, dispute settlement as well as some other issues.
RCEP is anticipated to achieve a high level of tariff liberalization for trade in goods, building on existing liberalisation levels between participating countries. For trade in services, RCEP will be comprehensive and consistent with WTO rules.
However, the RCEP is less ambitious in its scope and coverage than the Trans-Pacific Partnership (TPP), a proposed FTA between various Asian and Pacific Rim countries (the US, Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Chile and Peru) which has received much more attention that the RCEP, but whose progress has been thwarted. The TTP aims to build a top quality or so-called “gold standard” FTA covering a very wide range of issues with stricter requirements.
The countries involved in the RCEP negotiations represent half the world’s population, 30% of GDP and 20% of global exports.
At What Stage are the Negotiations?
The first round of RCEP negotiations commenced in November 2011. The 15th round took place in October 2016 in China, and the 16th round is scheduled for December 2016 in Indonesia.
Thus far, progress with the RCEP negotiations has been promising. The ASEAN countries are proving to be the main driving force, but India and China – essential RCEP participants due to their economic size and location – are both now publicly supportive of the RCEP.
RCEP vs. TPP
The TPP – which notably includes the United States and other non-Asian Pacific Rim countries and excludes China and India – has been concluded and signed by its 12 member states, but not ratified by any of the member states. Its progress now largely depends on the lead of the US. This could change with a new US government, but it remains to be seen if this occurs.
Meanwhile, the prospects for the RCEP coming to fruition may be brighter. Unlike the TPP, the signatories represent a coherent regional group, rather than a geo-political collective of states. And while it may not be openly articulated, the TPP’s failure does provide added incentive for RCEP states to seize economic opportunities lost through the TPP’s failure, provided an agreement can be concluded. The fact that the bar is lower with the RCEP than the TTP in terms of it being less comprehensive and not aspiring to be a “gold standard” FTA, like the TPP, means it may be easier for the RCEP states to reach agreement.