Officials from ASEAN and the group's key trade partners have agreed to start formal talks on a new regional trade agreement. Negotiations on the Regional Comprehensive Economic Partnership (RCEP) are now set to begin in 2013.
In other regional economic news, the Asia-Pacific Economic Cooperation (APEC) summit week has begun in Russia, leading up to the main meeting of leaders on 8-9 September.
Regional Comprehensive Economic Partnership Talks in 2013
Last week, following the ASEAN Economic Ministers Meeting, officials announced that formal negotiations on the RCEP would begin next year. This follows successful bilateral discussions with the involved parties.
RCEP aims to bring together ASEAN and its FTA partners, currently Australia, China, Japan, South Korea, India, and New Zealand, unifying trade agreements to effectively create a single free trade area across the region. Such a free trade area could potentially comprise some 3.33 billion people. The RCEP was endorsed by Leaders at the 19th ASEAN Summit in Bali in November 2011, and will be launched officially by Leaders at the 21st ASEAN Summit in Phnom Penh in November this year.
RCEP is an ASEAN-led process building on previous regional initiatives, and is viewed by some observers as a compromise between previously proposed agreements centering on ASEAN+3, favoured by China, and agreements based on ASEAN+6, preferred by Japan.
Instead of working with a pre-determined membership, RCEP will be based on open accession, allowing any of ASEAN's current FTA partners (China, South Korea, Japan, India and Australia-New Zealand) to participate, either joining from the outset or at a later stage. RCEP would also be open to other countries joining the agreement.
"The RCEP is based on the "ASEAN ++" formula which takes into account the East Asia Free Trade Agreement (EAFTA) and the Comprehensive Economic Partnership in East Asia (CEPEA). The objective of RCEP is to achieve a comprehensive economic partnership agreement that is expected to involve deeper engagement and harmonisation over the existing ASEAN FTAs with Dialogue Partners," explained Dr. Hank Lim, Senior Research Fellow at the Singapore Institute of International Affairs.
"The official launching of RCEP negotiations next year is very timely in view of progress of the US-led Trans Pacific Partnership (TPP) and the agreement to start a trilateral China, Japan and Korea FTA negotiations. The RCEP is a strategic initiative to re-position ASEAN as the "hub" of regional cooperation and integration."
Dr. Lim added: "It is, therefore, vital for ASEAN to complete the ASEAN Economic Community by 2015 as scheduled, accelerate the work of RCEP Working Groups on Trade in Goods, Services and Investments, particularly on Services and Investment."
"In addition, due to the "Spaghetti-bowl syndrome" in the region, it should encourage rationalisation and a simplified approach to Rules of Origins (ROOs) in the region through harmonised ROOs, coequal of rules and cumulation of value contents."
Report: ASEAN slated to begin FTA talks next year [Jakarta Post, 3 Sep 2012]
Analysis: Asia’s Regional Comprehensive Economic Partnership [East Asia Forum, 27 Aug 2012]
APEC Summit Week Begins
Russia is hosting the 2012 Asia-Pacific Economic Cooperation forum (APEC) this week. The meetings opened on Sunday with its usual senior officials' meeting aimed at identifying issues for further discussion (pictured). The week of talks concludes with a meeting of leaders from all APEC countries on 8-9 September.
This is the first time Russia is playing host to APEC. Russia has been silent on APEC matters for years, but has put forward a range of proposals this year. The Putin-Medvedev government has placed greater emphasis on APEC, with the aim of reviving the economy of Russia's Far East.
The site of the meeting, the port city of Vladivostok, demonstrates this motive. Vladivostok has received previously unprecedented public investment in infrastructure development, totalling US$22 billion in 2008–12, demonstrating the government's commitment to the development of Russia’s Pacific region.
The 7 May presidential executive order on foreign policy issued after Mr. Putin's inauguration also stressed the need for broader involvement in Asia Pacific regional integration. The priorities Russia has chosen for its 2012 chairmanship of APEC are trade and investment liberalisation, regional economic integration, food security, reliable supply chains and innovative growth.
Russia is keen to be seen as an active APEC member, and is looking to strengthen ties in the Asia Pacific beyond China.
Report: APEC 2012 opens with senior officials meeting [China Daily (Xinhua), 2 Sep 2012]
Analysis: APEC: Russia’s window to the Pacific [East Asia Forum, 2 Sep 2012]
Analysis: Russia’s APEC moment [East Asia Forum, 1 Sep 2012]