Negotiators optimistic over RCEP final deal

National 3 minutes, 33 seconds

BANDAR SERI BEGAWAN

NEGOTIATORS are still optimistic that a final deal for the Regional Comprehensive Economic Partnership (RCEP) can be reached by the end of 2016, said the official leading talks in Brunei this week.

Iman Pambagyo, chairman of the 11th round of RCEP negotiations being held in Brunei from February 15-19, said pressuring India to eliminate more tariffs and improving existing offers on services and investments are some of the key issues that need to be addressed.

Senior officials from 16 countries – the 10 ASEAN nations plus Australia, China, India, Japan, New Zealand and South Korea – are meeting at the International Convention Centre over the next four days to cement a deal for what could become the second largest economic bloc in the world, behind the market of Trans Pacific Partnership (TPP).

“My objective for this round is to ensure countries live up to the agreed modalities… But we will also try to confront some of the most difficult issues on goods, services and investment as well,” Pambagyo told The Brunei Times yesterday.

“How to make sure by the end of the day we can come up with a good agreement, rather than concluding the negotiations for the sake of conclusion.”

The goal of RCEP is to consolidate all of ASEAN’s existing free trade agreements (FTAs) into a single economic alliance, forging deeper economic cooperation by liberalising services and providing more investment opportunities in Asia-Pacific.

The GDP of the proposed RCEP bloc would be US$17 trillion, making it the largest single market in the world, even bigger than the Unites States or the European Union.

Touching on the challenges of this week’s talks, Pambagyo said ASEAN must bridge the gaps between its dialogue partners.

“Not all ASEAN FTA partners have bilateral FTAs with each other… We all have different sensitivities. For example, with Australia and NZ, we don’t have so many difficulties in terms of liberalising goods but the story is different with India.”

One of the key sticking points is that India has refused to lower tariffs to China, Australia and New Zealand, offering to eliminate duties on only 42.5 per cent of products. In comparison, it has offered tariff concessions for 65 per cent of goods to Japan and South Korea, and 80 per cent to ASEAN.

“In terms of goods, we can come up with a better offer on the table. Similarly on services I would like to see some development or improvement from some parties,” said Pambagyo.

“It is important for us to have a good start here in Brunei. This is the first meeting of the TNC (trade negotiating committee) in 2016 and we have to have a better process of engagement.”

Pambagyo, who is also Indonesia’s deputy permanent representative to the World Trade Organisation (WTO), said negotiations must be intensified in order to meet the 2016 deadline, and that additional rounds should be added for August, October and December. But organising a full-fledged TNC meeting is a challenge due to logistics and cost, he said.

“Last time we had a full-fledged meeting was in Busan in October and it involved 744 officials from 16 countries, plus the ASEAN secretariat. Hosting a full-fledged TNC plenary is really a challenge. Not just arranging the meeting itself but also budgeting.”

The chairman added that through RCEP, ASEAN hopes to “expand and deepen” regional supply chains, so more parties can benefit from the region’s economic prosperity.

He said the RCEP is not a rival agreement with the recently concluded Trans Pacific Partnership (TPP), but is complementary, with both agreements possibly paving the way for a Free Trade Area of the Asia-Pacific (FTAAP).

“If you compare it TPP – we are talking about Canada, US, Australia, Chile, Peru – they don’t have really huge cumulative investment in the region. So I think it will be misleading if you compare RCEP and TPP. Let alone if we argue that RCEP is ASEAN or China’s response to the TPP,” Pambagyo said.

“The TPP should not be the only platform to establish FTAAP. RCEP should be taken into consideration as well when we talk about FTAAP because we have China, we have India... So I would say that TPP and RCEP would be a starting point once we have both agreements in place.”

The Brunei Times