Talks on new trade pact to start May 9
BANDAR SERI BEGAWAN
TALKS on establishing one of the world's largest free trade pacts, the Regional Comprehensive Economic Partnership (RCEP), will start next month in Brunei, said His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam yesterday.
"Next month here in Brunei, we will begin negotiations on one of the world's largest trade pacts, the Regional Comprehensive Economic Partnership, which we hope will further integrate ASEAN into the global economy," the monarch said at a press conference following the conclusion of the 22nd ASEAN Summit held here.
ASEAN Secretary General Le Luong Minh told a press conference that the initial talks are slated for May 9 to 15.
A joint statement issued following the meeting also said that ASEAN leaders looked forward to starting the RCEP negotiations and broadening as well as deepening of existing ASEAN+1 free trade agreements.
Leaders envision the RCEP to be a platform for future trade and investment integration in Asia and the rest of the world.
Led by ASEAN, the RCEP negotiations will include all ten ASEAN member states and their six free trade agreements (FTAs) partners namely Australia, the People's Republic of China, India, Japan, the Republic of Korea and New Zealand.
ASEAN aims to complete RCEP negotiations by 2015.
According to an earlier AFP report, the negotiating countries encompass more than three billion people and generate about one-third of global economic output.
The pact aims to tie together ASEAN's bilateral free-trade agreements with each trading partner, but excludes the United States, which is leading talks for a rival trade agreement called the Trans-Pacific Partnership (TPP), the report added.
The TPP currently involves 12 countries: Australia, Brunei, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam.
The RCEP joins a profusion of regional trade pacts that are moving forward.
"The RCEP provides an important platform for building trade liberalisation within the Asia-Pacific, which is the world's fastest growing region," Rajiv Biswas, chief regional economist at IHS Global Insight, was quoted as saying in the AFP report.
"The initiative is very important as it includes the three major drivers of emerging markets growth China, India and ASEAN."
Potential members have said they are keen to make progress on the RCEP, despite being engaged in diplomatic rows over various rival territorial claims in the region.
China, the Philippines, Vietnam, Brunei and Malaysia have competing claims to parts of the South China Sea.
China and Japan are also locked in a dispute over islands in the East China Sea.
Relations between Tokyo and Seoul have also been strained over a dispute over a Seoul-controlled chain of islets in the Sea of Japan (East Sea).
"The South China Sea disputes remain an important risk to East Asian relations, with growing evidence of a regional arms race," Biswas was quoted as saying. "Nevertheless, China and ASEAN can be expected to give a high strategic priority to pursuing their RCEP negotiations, given the growing importance of intra-Asian trade as a regional growth driver."
Brunei is anticipated to benefit the most from the establishment of the RCEP, according to the Asian Development Bank.
In a chart comparing partner countries' projected income gains from the RCEP by 2025, measured by a change from the countries' gross domestic product in 2007, Brunei comes out on top of with a gain of six per cent.
Vietnam comes in second with five per cent while Korea is predicted to be the third nation that will benefit the most from the partnership, with a gain of almost four per cent in GDP.
Malaysia is the fourth nation to benefit most from the RCEP an expected income gains of just above three per cent and Thailand comes in next with a projected income of slightly below three per cent.
The Philippines is sixth, and is anticipated to achieve an income gain of above two per cent by 2025.
India, other ASEAN members, Japan, China, Indonesia and Australia are all projected to see a one per cent gain in their GDP from the trade agreement.