RCEP COMES TO TOWN

It’s not a secret – negotiators from the sixteen member economies of the Regional Comprehensive Economic Partnership (RCEP) are meeting in Auckland 12-18 June.

RCEP brings together the ten ASEAN economies plus the three North Asian giants (China, Japan and Korea) and Australia, New Zealand and India. RCEP is sometimes styled as a sort of Chinese-led version of TPP. It is not. ASEAN is in the driving seat, not China. And while on paper RCEP might appear as ambitious as TPP, it may not yet reach as far.

As we posted on this site back in December “clearly RCEP has the potential to be a very significant trade agreement if it lives up to its goal of being a modern, comprehensive, high-quality and mutually beneficial economic partnership agreement. RCEP seeks to build on ASEAN’s network of bilateral free trade agreements (FTAs). The trouble is that some of these FTAs weren’t all that ambitious to start with. At the half way stage of the RCEP talks, there are signs that the market access provisions will be less exciting than TPP”.

Some water has flown under the bridge since then but RCEP needs to be more ambitious if it is to deliver for the region’s businesses. That includes a high level of tariff elimination, flexible rules of origin, services liberalisation and measures to streamline regional value chains through trade facilitation, investment and regulatory coherence and co-operation. Measures to ensure the agreement is relevant to SMEs are important. Don’t hold your breath though for the sort of enforceable environment and labour commitments we see in TPP.

New Zealand already has FTAs with 14 of the 16 RCEP participants. TPP, once ratified, will deliver an FTA with Japan leaving India as the main interest for us. Our own bilateral FTA negotiations with India have languished in recent years. An ambitious and comprehensive RCEP could also play a role, alongside TPP, in creating a pathway for wider regional trade liberalisation.

As host for this 13th round of RCEP negotiations the New Zealand is organising two stakeholder sessions on Tuesday 14 June at the Sky City Convention Centre for those wanting to find out about or make input into these negotiations. Further information is available at https://mfat.govt.nz/en/trade/free-trade-agreements/agreements-under-negotiation/rcep/

This post was written by NZIBF Executive Director Stephen Jacobi.