ASEAN ministers say updating current trade deals will complement RCEP talks
ASEAN ministers discussed ways to build up economic links so that businesses can survive turmoil. © Reuters
SINGAPORE — The countries of Southeast Asia affirmed their support for free trade on Saturday as uncertainties in the global trade environment threaten to hurt exports, which they see as crucial to their economic growth.
The economic ministers of the Association of Southeast Asian Nations agreed to strengthen individual free trade agreements on top of the broader Regional Comprehensive Economic Partnership trade pact it is seeking to sign, to ensure that barriers to trade will be brought down.
“ASEAN countries and RCEP countries all believe in a multilateral system, a rule-based system,” Singaporean Trade and Industry Minister Chan Chun Sing, the chairman of the gathering, told reporters at the conclusion of the meeting.
“We believe that this is the best way to overcome many of the challenges that we are facing in a current global economic environment,” he said.
One achievement of this weekend’s talks was a commitment to deepen the ASEAN-China FTA. By January, the two sides will revise product-specific rules in line with the facts on the ground with a goal of further boosting trade.
The bloc also wrapped up a joint feasibility study toward an FTA with Canada. Meanwhile, the FTAs with Australia and New Zealand are set to be updated and improved.
The renewed focus on bilateral FTAs come as the bloc attempts to reach a “substantial conclusion” by year-end on the RCEP, a massive free trade pact that comprises the 10 ASEAN countries, plus China, India, Japan, South Korea, Australia and New Zealand.
While Singapore’s Chan said that “broad agreement is in sight” regarding the RCEP and that members intend to strike a deal around the time of November’s ASEAN summit meetings, there are fears that obstacles will arise in the final stretch.
RCEP negotiations have been going on for five years now, and members will need to make significant compromises for the pact to be considered “concluded” by the end of 2018.
If the RCEP’s free trade provisions were weaker than those guaranteed by existing FTAs, the pact would have little significance. ASEAN already has individual FTAs with the six other RCEP members, and upgrading the provisions of those FTAs are seen as laying the groundwork for the broader pact.
It is “more challenging” for countries without bilateral FTAs to negotiate tariffs from scratch in the RCEP discussions, Chan noted. Whether countries like India and China, with no such existing trade pact to serve as a foundation for negotiations, can come together is seen as a key to sealing the deal.
“We must ensure that we continue to build up our links with more countries to diversify our reliance on any one particular market, so that our businesses will not face discontinuity even if there’s a disruption in one particular market,” Chan said.
ASEAN continues to lower trade barriers within its region, which encompasses more than 20% of global trade. Members have removed 98.6% of internal tariffs, up from 96.01% a year earlier, with laggards like Cambodia, Laos, Myanmar and Vietnam now becoming more open. The bloc aims to further its economic integration by removing nontariff barriers as well. By TAKASHI NAKANO, Nikkei staff writer
The views and opinions expressed in this article do not necessarily reflect the official policy or position of the ASEAN Trade Union Council.
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