SINGAPORE — “The Association of South-east Asian Nations (ASEAN) has to drive the evolving regional economic architecture,” said a senior Malaysian civil servant yesterday. “And to do so, the grouping first needs to go beyond the perception that two major regional trade treaties, the Regional Comprehensive Economic Partnership (RCEP) and the Trans-Pacific Partnership (TPP) are driven by China and the United States respectively.
“We have to dispel the notion that RCEP is China-driven. RCEP was conceived by ASEAN, not by China. Likewise, TPP is seen to be US-driven, but the concept of TPP started with four small countries and people tend to forget that,” said Ms Rebecca Fatima Sta Maria, the secretary-general of the Malaysian Ministry of International Trade and Industry in an interview with TODAY, after speaking at “The ASEAN Advantage: Building Successful Business in ASEAN” programme organised by Nanyang Business School and S Rajaratnam School of International Studies yesterday.
“ASEAN must drive this (RCEP), it is a credit to ASEAN that it can push for this,” she said, adding that it will be a major coup for ASEAN to conclude the agreement.
RCEP was first mooted during the 19th ASEAN Summit in November 2011, while the TPP started with a little-known four-party free trade agreement concluded in 2005 by New Zealand, Chile, Singapore and Brunei.
The 10-member ASEAN as well as China, Japan, South Korea, Australia, New Zealand and India have been negotiating the RCEP since May 2013. Leaders of the 16 countries agreed to push for the conclusion of this massive regional free trade area by this year, after 10 rounds of official-level talks and four ministerial meetings failed to meet their earlier targeted deadline, which was the end of last year.
The RCEP negotiations have proceeded in parallel with the more high-profile free trade talks on the TPP. There is pressure to speed up the RCEP negotiating process after the 12 countries in the TPP signed the deal last month.
Ms Rebecca said that there is pressure on the RCEP negotiators to sort out core parts of the agreement, including trade, investment and services, as well as to find a “common landing ground” for the Rules of Origin.
“Yes it is going to be a challenge (to meet the deadline) but we need to ensure the ASEAN position is clear, that it is ASEAN that is driving the process,” she said.
On the TPP, Ms Rebecca is confident that ASEAN members who are not part of the pact would still be able to enjoy benefits.
Four ASEAN countries (Brunei, Malaysia, Singapore and Vietnam) have signed the TPP, which accounts for 40 per cent of global output, while other member states, including Indonesia and Thailand, have indicated an interest in joining the agreement in future. “We (ASEAN countries who signed the TPP) are tied to our partners and if we rise, other parties will benefit as well. Our value and supply chains are tied, and as we improve, we will bring them along with us,” she said, adding it is not a win-lose situation.
Ms Rebecca, who has been with the Malaysian civil service since 1981, also shared her thoughts on the Malaysian economy, which is facing challenging economic headwinds. Global headwinds along with tumbling oil prices have had Malaysia lowering its growth target slightly by half a percentage point. The economy is now expected to grow between 4 and 4.5 per cent this year.
Ms Rebecca said the country is “not going down the route of austerity” although she acknowledged businesses are feeling “cautious”.
However, she stressed that the government has been proactive by putting in place measures to weather the challenges, including revising its Budget in January and setting up a special economic panel comprising the private sector to brainstorm measures that can be put in place to ensure the country remains competitive.
“The rule of the government at times like this is to ensure we don’t add to the woes of businesses. The business community is cautious so we try to work with them to see what we can do to alleviate their burden, how to assist small businesses to grow in these headwinds we are facing.” By Eileen Ng
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