ASEAN member-states aim to dictate the negotiations on the trade in goods modalities under the proposed Regional Comprehensive Economic Partnership (RCEP)—now composed of 16 negotiating parties—as reflected in the “Key Elements for Significant Outcomes by End of 2017” document endorsed by Southeast Asian economic ministers.
In dictating the RCEP terms, the 10-member regional bloc wants its trading partners Australia, China, India, Japan, South Korea and New Zealand to go for liberalization levels unseen in Asean free-trade agreements (FTA).
Trade Secretary and Asean Economic Ministers Chairman Ramon M. Lopez said the ambitions of the RCEP should now be better than any FTA forged by the Asean, or the so-called Asean+1 FTAs. “The important thing is that whatever the landing zone or objective will be, it will have to be better than the current individual Asean country FTAs, or Asean+1 FTA.”
On the level of trade in goods liberalization, for instance, the Asean wants 92 percent of all merchandise to be traded at zero tariff under the RCEP.
This “magic number”, Lopez said, is being rejected by non-Asean members of the RCEP.
“We have been saying that these participating countries [the six dialogue partners] will have to recalibrate and be more realistic in setting their expectations on RCEP so we can really move this forward. We’re requesting them that they base their offers on this [level],” the AEM chairman said, noting that the quicker the other countries adjust their position, the faster a substantial conclusion can be met.
The regional bloc wants a partial deal by November at the Asean Leaders Meeting in Manila.
The Asean bloc, led by the Philippines this year, said it has put forward a unified stance in the “Key Elements for Significant Outcomes by End of 2017” paper.
The document contains the parameters and guidelines that will dictate the terms of a “substantial conclusion” of the RCEP. This is infused with an “Asean-led” mind-set, according to Trade Undersecretary and the Philippines’s Asean Economic Ministers Lead Ceferino S. Rodolfo.
Generally, the key elements endorsed cover market access and technical rules on the RCEP. The paper spells out the broad parameters of the RCEP’s level of liberalization, timing, percentage inclusion and the controversial value-added mechanisms.
“We have to emphasize that RCEP is Asean-led and Asean-centric. This led to general acceptance among the six dialogue partners and they will now consult their respective capitals and ponder on Asean’s more concrete position to move forward,” Lopez said.
The six Asean trading partners in the RCEP, upon consideration of the parameters of the “Key Elements” paper, can begin their respective domestic consultations and submit their counter offers to the Asean starting September 22.
These offers will be the substance of the discussions in the last RCEP Trade Negotiating Committee in October. The results will be forwarded to the economic ministers in time for the November Asean summit.
Deputy Secretary-General for Asean Dr. Lim Hong Hin said the median level of trade in goods liberalization across all Asean+1 agreements in 90.3 percent. The RCEP, he noted, must build on this and go higher.
Lopez said half of the six dialogue partners already expressed willingness to adjust to the 92-percent level proposed by the Asean. The other three are vying for either a lower commitment or much higher than what the Asean is ready to give.
“Some want 100-percent inclusion, some 98 percent, others are below. We, Asean, is saying let’s just look at this one level of 92 percent. That level is still better than other FTAs the bloc has done,” Lopez added.