Negotiations for concluding a proposed Regional Comprehensive Economic Partnership (RCEP) between 16 nations across East Asia reached a critical stage at the end of last month.
RCEP is a proposed mega free-trade agreement (FTA) in East Asia. It is based on existing trading arrangements between Association of South East Asian Nations (ASEAN) trade bloc members, which are also in dialogue with six other partners: Australia, China, India, Japan, South Korea, and New Zealand.
At RCEP’s sixth two-day meeting in Singapore, top ministers came together and pledged to endorse a package of outcomes by year-end. Some elements of the deal also neared conclusion. While two of these elements - one on economic and technical cooperation and the other on small and medium enterprises - had already been completed, a further two - on government procurement as well as customs procedures and trade facilitation - were also finalised at the event.
But key concerns remain on other issues that are still outstanding such as ecommerce and data, intellectual property and market access to sectors such as agriculture. Despite the slow progress made here so far, member states are confident that they should be able to narrow the gaps and conclude a deal by November.
The next time RCEP trade officials meet will be in Auckland, New Zealand, between 17 and 24 October as they try to iron out differences in their respective positions. Two further rounds of ministerial meetings are expected to take place before heads of states meet at November’s RCEP Summit.
Implications for the ASEAN trade bloc
A key objective of RCEP is to create a modern, comprehensive, high-quality and mutually beneficial economic partnership agreement between participating countries. The deal is intended to cover trading in goods and services, investment, economic and technical cooperation, intellectual property, competition, electronic commerce and dispute settlement, among other issues.
RCEP has the potential to deliver significant opportunities for businesses in the region. The 3.4 billion citizens who live in the 16 participating countries account for about 45% of the world’s population. They also generate about a third of the world’s entire gross domestic product (about US$20 trillion) and trade (about US$10 trillion).
Once implemented, the agreement is expected to promote investment and increased trade in goods and services across the region. It is also anticipated to help in the development of regional rules for trade and commerce.
While ASEAN members currently have multiple, standalone ‘plus-one’ trade agreements with their FTA partners, this approach has created complex structural barriers with regards to applying different tariff rates and domestic rules of origin provisions. RCEP is intended to streamline rules and procedures for each FTA and minimise existing trade inefficiencies. Regulations for new fields such as intellectual property and ecommerce will likewise be developed.
It is also hoped that RCEP will support the spread of global production networks and supply chains across East Asia and play an important role in reducing the economic gap between developed and developing countries in the region.
This article was first published on ASEAN Briefing.
Since its establishment in 1992, Dezan Shira & Associates has been guiding foreign clients through Asia’s complex regulatory environment and assisting them with all aspects of legal, accounting, tax, internal control, HR, payroll and audit matters. As a full-service consultancy with operational offices across China, Hong Kong, India and ASEAN, we are your reliable partner for business expansion in this region and beyond. For inquiries, please email us at info@dezshira.com. Further information about our firm can be found at: www.dezshira.com.
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Negotiations for concluding a proposed Regional Comprehensive Economic Partnership (RCEP) between 16 nations across East Asia reached a critical stage at the end of last month.
RCEP is a proposed mega free-trade agreement (FTA) in East Asia. It is based on existing trading arrangements between Association of South East Asian Nations (ASEAN) trade bloc members, which are also in dialogue with six other partners: Australia, China, India, Japan, South Korea, and New Zealand.
At RCEP’s sixth two-day meeting in Singapore, top ministers came together and pledged to endorse a package of outcomes by year-end. Some elements of the deal also neared conclusion. While two of these elements - one on economic and technical cooperation and the other on small and medium enterprises - had already been completed, a further two - on government procurement as well as customs procedures and trade facilitation - were also finalised at the event.
But key concerns remain on other issues that are still outstanding such as ecommerce and data, intellectual property and market access to sectors such as agriculture. Despite the slow progress made here so far, member states are confident that they should be able to narrow the gaps and conclude a deal by November.
The next time RCEP trade officials meet will be in Auckland, New Zealand, between 17 and 24 October as they try to iron out differences in their respective positions. Two further rounds of ministerial meetings are expected to take place before heads of states meet at November’s RCEP Summit.
Implications for the ASEAN trade bloc
A key objective of RCEP is to create a modern, comprehensive, high-quality and mutually beneficial economic partnership agreement between participating countries. The deal is intended to cover trading in goods and services, investment, economic and technical cooperation, intellectual property, competition, electronic commerce and dispute settlement, among other issues.
RCEP has the potential to deliver significant opportunities for businesses in the region. The 3.4 billion citizens who live in the 16 participating countries account for about 45% of the world’s population. They also generate about a third of the world’s entire gross domestic product (about US$20 trillion) and trade (about US$10 trillion).
Once implemented, the agreement is expected to promote investment and increased trade in goods and services across the region. It is also anticipated to help in the development of regional rules for trade and commerce.
While ASEAN members currently have multiple, standalone ‘plus-one’ trade agreements with their FTA partners, this approach has created complex structural barriers with regards to applying different tariff rates and domestic rules of origin provisions. RCEP is intended to streamline rules and procedures for each FTA and minimise existing trade inefficiencies. Regulations for new fields such as intellectual property and ecommerce will likewise be developed.
It is also hoped that RCEP will support the spread of global production networks and supply chains across East Asia and play an important role in reducing the economic gap between developed and developing countries in the region.
This article was first published on ASEAN Briefing.
Since its establishment in 1992, Dezan Shira & Associates has been guiding foreign clients through Asia’s complex regulatory environment and assisting them with all aspects of legal, accounting, tax, internal control, HR, payroll and audit matters. As a full-service consultancy with operational offices across China, Hong Kong, India and ASEAN, we are your reliable partner for business expansion in this region and beyond. For inquiries, please email us at info@dezshira.com. Further information about our firm can be found at: www.dezshira.com.
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