Malaysia pins hopes on signing RCEP this year

By SHAZNI ONG / Pic By ISMAIL CHE RUS

The government is still hoping to sign the proposed Regional Comprehensive Economic Partnership (RCEP) by this year, despite pending several issues that need to be sorted out.

Deputy International Trade and Industry Minister Dr Ong Kian Ming (picture) said the level of trade liberalisation is one of the pending issues, and that the matter is being deliberated among member countries.

“The percentage of goods that will not be charged a new tariff — whether it’s 80% or 70% of goods traded, for example — is still being deliberated by the participating countries.

“Some want more, some are less open to greater trade liberalisation,” he told reporters after attending the Asean Integration Outlook 2019 organised by CIMB Asean Research Institute in Kuala Lumpur yesterday.

The RCEP is a proposed free trade agreement (FTA) among the 10 Asean member countries and six countries that the regional grouping has existing FTAs with — namely Australia, China, India, Japan, South Korea and New Zealand.

However, the treaty is occasionally viewed as a China-led response to the defunct Trans-Pacific Partnership brought forward by the US previously.

Nevertheless, the RCEP is expected to be ratified by this year after several delays in negotiations.

A combination of all of the 16 countries negotiating on the RCEP would cover some one-third of the global GDP and almost half of the world’s population.

The pact aims to encompass trade in goods and services, investments, intellectual property and dispute resolution, among others.

Ong said all eyes are currently on India as the country is expected to hold its general election (GE) from April 11 to May 19, 2019.

He added that the participating nations are waiting to see the outcome of the Indian GE and to see what kind of position that the new administration will take on the RCEP.

“We are cautiously optimistic. We make slow progress in terms of each session, but at the end of it, I’m quite sure that we’ll get towards the stage where we can have a substantive conclusion.

“Regardless, I believe that whoever takes power after the Indian GE would also have to consider very seriously for a push towards greater trade liberalisation,” Ong said.

In January, it was reported that Malaysia hopes to conclude talks with other RCEP member countries by the end of this year.

Ong was quoted as saying that the government was able to make some progress at the end of 2018 in Singapore, but has not reached a substantive conclusion.

He said there aren’t any strong indicators that the government will be able to finish it in the first half of 2019 as the negotiations are ongoing, and that it will take until the rest of the year to get to the end stage.

Interest in a deal heightened throughout the region after the emergence of economic nationalism in the US and its trade war with China.

An agreement could be signed after the GEs in India, Indonesia and Australia, but stumbling blocks — such as New Delhi’s reluctance to open its markets to Chinese products — remain.

Meanwhile, commenting on the performance of the country’s foreign direct investment (FDI), Ong said: “I’m quite confident that it will (exceed last year’s figures), but the details will be announced by the minister on Thursday.”

The Department of Statistics Malaysia and Malaysian Investment Development Authority are expected to release the latest figures of the country’s FDI performance on Thursday.