RCEP on the Rise
The Ministry of Trade, Industry & Energy announced on December 5 that the 16th round of negotiations for the Regional Comprehensive Economic Partnership (RCEP) is underway from December 6 to 10 in Tangerang, Indonesia. A total of 16 countries are to take part in the RCEP – 10 ASEAN member countries, South Korea, China, Japan, Australia, New Zealand and India. They have a total population of 3.5 billion or so along with a GDP of US$22.4 trillion, equivalent to 30.6% of the global total.
The RCEP is led by China and China is trying to cope with the Trans-Pacific Partnership (TPP) led by the U.S. by means of the RCEP. The total GDP of the 12 TPP member countries including Japan, Mexico, Australia, New Zealand and Vietnam is US$27.4 trillion.
The negotiations for the TPP were concluded in October last year and the agreement was signed in February this year. On the contrary, those for the RCEP have shown a very slow progress. The deadline has been extended by one year but the participants have reached an agreement in only one out of 14 fields of negotiations.
Things have drastically changed though with the election of Donald Trump as the President of the United States. He is regarding the TPP as a potential catastrophe and has declared that the U.S. would withdraw from it once he takes office in January 2017. This is an opportunity on the part of China. According to some experts, China is likely to mention a specific period for the conclusion of the negotiations in Tangerang and may suggest a higher degree of market opening for a rapid progress of the talks.
“At the 16th round of talks, the member countries are expected to voice their discontent with Donald Trump’s trade protectionism,” said the Korea Institute for Industrial Economics & Trade. The South Korean government recently remarked, “The importance of the RCEP is on the rise as a mega FTA in the Asia-Pacific region with trade uncertainties mounting due to the spread of trade protectionism.”