With the RCEP pretty much a done deal aside from the need to solve outstanding issues with India, attention must now be shifted to ASEAN’s next trade agendas with other trading partners, which are also not without their own challenges.
mid the surge of rising trade and political tensions currently engulfing global economic affairs, during the 35th ASEAN Summit held in early November in Bangkok, ASEAN and five of its trading partners finally announced that they have completed negotiations on the Regional Comprehensive Economic Partnership (RCEP) after seven years of frenzied talks spanning over 28 negotiation rounds. The world’s largest trade deal compromising 30 percent of global gross domestic product and half of the world’s population is now closer to becoming a reality.
RCEP is a modern trade agreement covering 20 chapters whose scope includes issues that go beyond trade in goods, services and investment such as a chapter on e-commerce as well as economic and technical cooperation. The RCEP was meant to solve the “noodle bowl” problem as ASEAN was entangled in a situation where it had multiple individual free trade agreements (FTAs) with each of its trading partners involved in the RCEP.
Negotiating the RCEP itself though was harder than navigating through a noodle bowl filled with various ingredients as negotiators had to balance the interests of all the trading partners in order to find a common understanding. Not all of the RCEP negotiating countries have solved the “noodle bowl” situation though, as in the Bangkok meetings India decided not to sign the RCEP due to what it called “significant issues of core interest being unresolved”.
Without India aboard, the RCEP cannot be considered as “done”, as the agreement uses the so-called “single undertaking” approach which in simpler language means nothing is agreed until everything is agreed.
Still, by being able to nearly conclude the RCEP negotiations at this point is a task that deserves a round of applause for RCEP negotiators and a major achievement for Indonesia, who first initiated discussions on creating the RCEP during the 2011 ASEAN Summit meetings and served the role as the chief negotiator.
The announcement in Bangkok is also a sign to the world that ASEAN and its trading partners are embracing the role of freer trade to boost the region’s growth prospects and contribute positively to the global economy rather than choosing the route of building walls and trade barriers.
With the RCEP pretty much a done deal aside from the need to solve outstanding issues with India, attention must now be shifted to ASEAN’s next trade agendas with other trading partners, which are also not without their own challenges.
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