CONCLUDING the Regional Comprehensive Economic Partnership (RCEP) might be taking longer as planned, but negotiators are biding their time in making sure all provisions satisfy the interests of participating countries, according to a top envoy.
In a recent BusinessMirror Coffee Club forum, New Zealand Ambassador to the Philippines David Strachan said his country is working hard toward the conclusion of RCEP negotiations. However, he admitted there really will be obstacles in finalizing the trade deal, given its far-reaching coverage.
“We want to see a comprehensive outcome, and we believe that has been up to make sure that this agreement is caught to the extent that everyone is going to be satisfied with the outcome. If it means it takes a little bit longer, then so be it,” Strachan said.
RCEP negotiators are determined to give the proposed agreement a go by the end of the year. However, reported disputes between the large economies involved in the talks have made it difficult for the trade deal to progress.
Strachan said New Zealand, as one of the RCEP negotiating countries, is willing to own up to being a party in the delay in the talks. However, he argued the delay is reasonable, as negotiators are looking at possibly one of the most ambitious, if not the most ambitious, trade agreement in history.
“We don’t believe in concluding an agreement for the sake of it,” Strachan said.
“This has the potential to be one of the largest free trade agreement the world has even seen. It has enormous potential for all the citizens,” the diplomat added.
In spite of the impediment in negotiations, Strachan reported that negotiators made significant headway in several provisions of the RCEP. “It is true what you say that there have been some delays, but, on the positive side, we are encouraged that, in the last round, they concluded chapters on customs procedures and trade facilitation, as well as government procurement,” he revealed.
The chapter on customs procedures and trade facilitation will streamline trade activities between RCEP economies, Strachan explained. On the other hand, the chapter on government-procurement targets to make transparent rules and regulations on purchasing processes of RCEP governments.
“The chapter on government procurement aims to promote transparency of laws, regulations and procedures, as well as cooperation among the parties regarding government-procurement. New Zealand, as well as some other countries in the negotiations, are showing substantial flexibility and have moved a long way in recent months to show that the real contribution we are making will get a substantial outcome on [the] RCEP later this year,” Strachan said.
The diplomat, however, argued RCEP economies have to be liberal with restrictions on foreign investment, as this will assist the ease of doing business in their countries and will produce “commercially meaningful market access” for parties involved.
According to Strachan, the RCEP will further improve bilateral trade between the Philippines and New Zealand. Total trade between the two countries was valued at $544.72 million last year, with Manila accumulating a trade deficit of $433.29 million.
“We see the RCEP as an important piece of architecture that has potential to deepen economic integration in the region. We consider [the] RCEP to be a substantial opportunity to build on existing trade relationships, and believe it will further develop New Zealand and the Philippines’s positive relationship,” Strachan said.
The RCEP is a multilateral trade agreement involving the 10 member-states of the Association of Southeast Nations and its trading partners Australia, China, India, Japan, New Zealand and South Korea. In 2016 RCEP negotiating countries accounted for almost half of world population, about 30 percent of global GDP and over 25 percent of world exports.
Image credits: Alysa Salen