Completion of RCEP will validate Asean’s role in regional economic integration, as well as global trade and investments
By P PREM KUMAR / Pic BERNAMA
Malaysia has endorsed the Regional Comprehensive Economic Partnership (RCEP), saying that the world’s largest trading bloc could bring significant economic prosperity to Asean countries.
Prime Minister (PM) Tun Dr Mahathir Mohamad said Asean countries could leverage on the positive impact of RCEP, which will not only benefit the regional grouping’s economies, but also its partners.
He said the South-East Asian region may claim to be the fastest growing economies in the world, but the completion of RCEP negotiations will validate Asean’s role in the economic integration of this region, as well as global trade and investments.
“An integrated FTA (free trade agreement) of 16 countries, when realised, will be a huge market in its own, representing half of the global population and over 40% of global trade.
“Both the Asean Economic Community (AEC) and RCEP can work in tandem to provide a good template for the rest of the world on moving forward towards inclusive and dynamic integration among countries of widely varying levels of development, but with common aspirations for robust development and deeper economic engagement with one another and the rest of the world,” he said at the Asean Business and Investment Summit 2018 in Singapore yesterday.
Dr Mahathir said some 65% of Asean’s trade with RCEP countries and the regional grouping, which was created more than five decades ago, should therefore leverage on the existing high level trade linkages.
RCEP is a proposed FTA between the 10 Asean countries and six Asia-Pacific nations — Australia, China, India, Japan, South Korea and New Zealand.
The RCEP member countries in total has a population of 3.4 billion people and a total GDP of US$49.5 trillion (RM207.45 trillion). China and India are the largest in the sheer size of the economy.
Negotiations on RCEP were launched in November 2012 at the Asean Summit in Cambodia. RCEP is seen as the alternative to the Trans-Pacific Partnership, which continues to
be shrouded in uncertainties after the US pulled out from the bloc.
But Dr Mahathir said Asean countries should not just accept trade and investment measures that are unfavourable to member nations.
“RCEP must facilitate not only the interest of big firms, but also the SMEs (small and medium enterprises) in the region. RCEP must see an enhanced role for SMEs to leverage and move towards becoming middle-sized and large companies.”
Dr Mahathir said as the region is working towards reducing its cost of doing business, Asean needs to continue to expand its market by engaging in FTAs with key dialogue partners.
“As such, on the external front, we must work to ensure Asean+1 FTAs and the RCEP that consists of 16 countries bring additional benefits to Asean, as well as its partners.”
However, AFP reported yesterday that the China-backed RCEP will be pushed back to next year as trade ministers failed to agree on key terms over the FTAs.
Trade diplomats said negotiations will run deep into 2019.
“We made significant progress,” New Zealand Minister of State for Trade and Export Growth Damien O’Connor told reporters after talks late on Monday.
“But we are very happy with that and it’s heading in the right direction,” he said, according to AFP.
The report said India’s concern on opening its markets to competition, especially from Chinese firms, is said to be one of the stumbling blocks.
But New Delhi’s delegation welcomed the incremental steps towards establishing the trade agreement.
“The future lies in RCEP,” Indian Trade Minister Suresh Prabhu told reporters, but urged a patient approach to talks to ensure “every country will benefit from it”.
Chinese Premier Li Keqiang, who is attending a Singapore summit to rally support for the deal, said he hopes RCEP would be signed and implemented next year.
“It (RCEP) is going to deliver real benefits to the people of our region,” he said in an address yesterday.
Meanwhile, Dr Mahathir said the US, China, Korea, Japan, Australia, Canada, the European Union, Russia and New Zealand should acknowledge that some Asean member countries would require assistance and flexibility in meeting the higher market aspirations of the developed economies.
“What we require is fair and mutually beneficial trade and investment cooperation, rather than the dominance by anyone,” he said.
Dr Mahathir said for Malaysia, free trade must also mean fair trade, which takes into account the economic levels of all trading partners.
“This is to ensure that trade relationships would not descend into new forms of colonialism, and to prevent trade from being used as a weapon to dominate.
“As far as Malaysia is concerned, we would be happy to be involved in a trade pact that provides benefits to the developing countries, especially in integrating companies from developing countries and least developed countries into the global supply chain,” the PM said.