The huge RCEP (Regional Comprehensive Economic Partnership)* trade deal is one way that New Zealand can offset the economic fallout of the trade war that is developing between the United States and China. RCEP negotiators aim to reach a “substantial conclusion” of the RCEP talks by the end of this year. To meet that goal, as well as the high expectations of the business community, the negotiations underway this week in New Zealand will need to close the gaps in key areas like market access.
The 24th round of RCEP talks is taking place in Auckland (20-26 October 2018). It includes stakeholder engagement meetings between RCEP negotiators and the business community. Business leaders must make the most of this face to face opportunity to influence the final shape of the negotiations.
It’s time to get our RCEP into gear!
What does business need from the RCEP?
- Goods market access remains a top business priority.
- We need tariffs to be eliminated on well over 90% of imports from each RCEP member. All key items of export interest including both tariff lines and value of trade should be included in the tariff elimination agreement. If we can achieve this then New Zealand’s trade interests in India, the only RCEP economy with whom we have not yet signed an FTA, will be substantially advanced.
- RCEP must also provide commercially meaningful liberalisation of trade in services.
- That means that key sectors like professional services should be included and the different ways that services are provided and consumed (the so called “modes of supply”) should be opened up.
- Unfortunately, the negotiators have already settled on a positive list approach which means services sectors will only be covered if specified in the agreement. Ideally RCEP should evolve over time to a negative list approach in which all sectors are included unless specifically ruled out.
- Business needs technical rules that will make it easier to do business around the region, such as:
- rules of origin that are simple, trade facilitative and business friendly, and which enable business to make the most of regional supply chains.
- Provisions to minimise non-tariff barriers (NTBs) to trade in goods, services and investment. RCEP should require all regulations to adhere to relevant international standards such as Codex. Product labelling, testing, licensing and registration requirements should be transparent, efficient, economical and consistent within RCEP.
- RCEP should also provide for efficient, transparent and user-friendly customs rules and procedures that are consistently applied.
- The good news is that negotiators have already agreed to a negative list approach to investment liberalisation so all investment is covered except where specifically exempted.
- Business also needs clear concise licensing and legal requirements for new investments and access to transparent information about FDI restrictions and any new regulations impacting on investment.
- Business needs a strong regime for intellectual property rights (IPR).
- This includes transparent procedures for IPR registration; improved access to IPR information and appropriate protection and enforcement of IPR.
- Business also needs provisions that facilitate e-commerce in the RCEP region.
It’s time to get our RCEP into gear!
The meetings here this week are a vital opportunity for the business community to remind negotiators that the RCEP deal must deliver on the “guiding principles” set out five years ago by RCEP Leaders. Their vision was for a modern, comprehensive, high-quality and mutually beneficial economic partnership that fosters and supports regional economic integration. The final RCEP outcome will be judged by the business community in New Zealand, and around the region, according to how far it goes in creating commercially meaningful business opportunities.
Submissions from the East Asia Business Council’s RCEP Working Group are available on the following link: http://www.eabex.org/eabc-working-group-for-rcep
This post was prepared by Fiona Cooper, Associate Director, NZIBF, who is also Vice-Chair of the East Asia Business Council’s RCEP Working Group.
*The parties to this proposed trade agreement are the ten-member states of ASEAN plus Australia, China, Japan, India, New Zealand and South Korea. This group makes up 39% of global GDP and covers nearly half the world’s population.