By P PREM KUMAR, ALIFAH ZAINUDDIN & DASHVEENJIT KAUR / Pic By ISMAIL CHE RUS
The escalating trade war between the US and China could drive the Asean to conclude the Regional Comprehensive Economic Partnership (RCEP) negotiations by year-end.
International Trade and Industry Minister Datuk Darell Leiking (picture) said the government hopes for a substantial update at the upcoming Asean Summit in November.
“Leaders have reaffirmed their intention to resolve regional trade deals in numerous meetings because it is an important effort. I am hoping something will come out by the end of the year,” he told reporters on the sidelines of the Malaysia: A New Dawn Investors’ Conference held in Kuala Lumpur yesterday.
Darell has stressed the importance of the regional grouping to form a bloc at a time of rising global trade uncertainties.
“The prospect of an intense trade war between China and the US is the top concern of most South-East Asian countries.
“The bloc’s ability to persuade its partners to move in the same direction will be crucial to reaching an agreement,” he said when asked on how long before a consensus can be reached among Asean nations.
If succeeds, RCEP will become the world’s largest trading bloc, accounting for 3.4 billion people with a total GDP of US$49.5 trillion (RM202.95 trillion).
The proposed mega freetrade agreement in East Asia is built upon the existing agreements of Asean with its six dialogue partners — Australia, China, India, Japan, South Korea and New Zealand.
RCEP’s key objectives are to achieve a modern, comprehensive, high-quality and mutually beneficial economic partnership between the participating countries.
The trade war between the US and China is already been felt globally.
“The collateral damage from the trade war is felt by everyone and not just Malaysia,” Darell said, in reference to Malaysia’s shrinking trade surplus.
The International Monetary Fund yesterday said the trade uncertainty would impact the Asean-5, namely Indonesia, Malaysia, the Philippines, Thailand and Vietnam.
It maintained a 5.3% growth forecast for the South-East Asian countries for this 2018, but lowered the 2019 estimate to 5.2%.
This came after analysts lowered Malaysia’s growth forecast following Malaysia’s record of its the lowest trade surplus in 45 months.
A slowdown in Malaysia’s exports relative to its imports in August led to a smaller trade surplus of RM1.6 billion, the lowest since October 2014.
“Sometimes, numbers don’t say it all. Our country can be doing good locally, but because of conditions out there we are impacted, especially trade wise.
“Hence, amid a growing tide of protectionism, Asean leaders are intent on pressing ahead with the trade liberalisation the bloc has been spearheading,” Darell said, stressing on the urgency to form the trade bloc.