At the bilateral meeting between Prime Minister Hun Sen and his counterpart, Tun Dr. Mahathir Mahamad, this week in Phnom Penh, both sides reasserted their political commitment to conclude the Regional Comprehensive Economic Partnership (RCEP) as soon as possible.
Also, at the bilateral meeting between Vietnamese Prime Minister Nguyen Xuan Phuc and Australian Prime Minister Scott Morrison in Hanoi late last month, both leaders shared the view that RCEP need to be concluded this year.
Now the political momentum is high that RCEP will be concluded by the end of this year, but with some tough compromises needed. The negotiation process has been quite slow and rocky due to the differences between the dialogue partners of ASEAN.
“With a bit of a political commitment from all sides, we can probably just cross the finishing line some time by the end of this year, if not the early part of next year,” said Singapore Trade and Industry Minister Chan Chun Sing.
The political momentum is high. The deal is very likely. All negotiating parties understand that RCEP is not only a multilateral instrument to mitigate economic risks stemming the escalating trade war but also to demonstrate a strong, collective political resolve to protect and sustain an open, inclusive and rules-based multilateral trading system.
RCEP negotiating parties consist of sixteen countries- the ten Asean member countries, China, India, South Korea, Japan, Australia and New Zealand. India has been reportedly the most challenging negotiation partner.
Recently, India has laid out a list of demands for market access, particularly to China, in both goods and services, including larger exports of drugs, sugar, rice, dairy, soybean, IT and other services.
Tough stance by India is seen as counterproductive to the negotiation process. Singapore’s Minister for Home Affairs and Law K. Shanmugam reportedly warned that If India opts to stay out of the RCEP, it could face a stark future.
India should be more flexible and courageous to take bold steps. Long-term interests should override short-term interests. The future of India is deeply connected with that of the Asia-Pacific. RCEP will further connect India with the region- which is dynamic and full of economic potential and opportunities.
RCEP covers trade in goods, trade in services, investment, economic and technical cooperation, intellectual property, competition, dispute settlement and other issues. The negotiation process started in 2013 after adoption of the Asean Framework for RCEP at the 19th ASEAN Summit in Phnom Penh in 2012.
The objectives of RCEP are to achieve a modern, comprehensive, high-quality and mutually beneficial economic partnership agreement, and build an open trade and investment environment in the region to facilitate the expansion of regional trade and investment and contribute to global economic growth and development.
RCEP, being built upon existing economic linkages, aims to further boost economic growth and equitable economic development, and advance economic cooperation and broaden and deepen integration in the region.
Amid uncertain times, the conclusion of RCEP is vital to the future of Asian economy. It will send a clear signal to the countries that are pursuing protectionism and unilateralism that Asian economies will continue to thrive by diversifying their supply chains and production networks. Deepening regional integration will help mitigate the risks caused by de-globalization.
Cambodia, as a small state, strongly supports multilateralism. Advancing an inclusive, open, effective, and rules-based multilateral system has become one of the key foreign policy objectives of the Kingdom. It has shown consistent support to the early conclusion of a high-quality and meaningful RCEP.
Moreover, Cambodia regards Asean as the security shield as well as an economic locomotive. And maintaining Asean unity and centrality, amidst rising geopolitical and economic uncertainties, is therefore critical to the survival and relevance of Asean.
The conclusion of RCEP will help further strengthen Asean’s central role in shaping the evolving regional economic architecture. It is timely crucial for Asean to double its effort to build a broad political consensus, facilitate and accelerate the negotiation process.
RCEP embeds strategic and political substance, particularly amidst the downturn of the world economic order and multilateral trading system. Protectionism is posing significant threat to international economy and security.
Therefore, RCEP is an important political and strategic instrument to resist the intention or temptation by a certain country to adopt a protectionist trading policy.
Asean has earned international legitimacy to forge collective actions and build regional and global partnerships to fight against protectionism and unilateralism. Cambodia definitely is proactively involved in such a mission.
Chheang Vannarith is President of the Asian Vision Institute (AVI).