Since the implementation of the first-rebound Regional Comprehensive Economic Partnership (RCEP) meeting in 2013, RCEP negotiators finally reached agreement on the modalities of trade in goods towards the next phase of negotiations. This moment occurs in the sidelines of the ASEAN Economic Ministers Meeting in Kuala Lumpur on Monday (August 24).
“Finally, the RCEP participating countries can agree on modalities of trade in goods. This achievement follows an agreement on the modalities of trade in services and investment that has been achieved at RCEP inter-session meeting of ministries in July 2015 in Kuala Lumpur, “said Indonesian Ambassador to World Trade Organization (WTO) as the Chief Negotiator of the Regional Comprehensive Economic Partnership Trade Negotiation Committee (RCEP TNC), Iman Pambagyo.
The RCEP ministries provide direction to the Trade Negotiating Committee (TNC) to prepare a request and Offer (Demand and Supply Package) negotiation process towards RCEP integration target at a next round meeting in Busan, which is a substantial achievement in late 2015 as mandate by Leader of RCEP participating countries.
The Ministries also asked the TNC to intensify its efforts to complete RCEP negotiations in 2016. If an agreement is successfully achieved in 2016, then the RCEP region will be the largest free trade area in the world that covers 49% of the world’s population, 30% of world GDP, 29% of total world trade, and 26% of world FDI inflows.
Currently, the economy of RCEP participants remained stable in the midst of slowing global economy. The total economic value of RCEP was recorded at USD 22.7 trillion in 2014 (or 29.3% of the world economy). In terms of trade, total trade reached USD 10.8 trillion, or about 28.4% of total world trade.
As for FDI (Foreign Direct Investment) that goes to the state, RCEP reached USD 366.3 billion, or 29.8% of total world FDI. Furthermore, Sondang Anggraini, representing the Minister of Trade of Indonesia, conveyed that RCEP negotiations not only include market access, but also discusses technical cooperation to reduce the existing economic gap. RCEP agreement is expected to eventually become a balanced deal that can accommodate the interest of all parties and can encourage the growth of value added industries that utilize RCEP market as a source of raw materials and export destinations (regional value chain).
RCEP cooperation can provide market access opportunities for Indonesia in the future, considering that the current Indonesian government under President Joko Widodo was massively building infrastructure that will encourage growth of the national industry as a driver of national economic growth.
Given the remaining time, Indonesia needs to work hard to prepare Supply and Demand Package of trade in goods, service, and investment while protecting national interest. The 10th round RCEP is planned to take place in Busan on October 12 to 16, 2015.
Meanwhile, in the ASEAN Ministrial Meeting, the ministers also expressed their support to efforts to improve the smoothness of trade in goods in ASEAN. ASEAN Economic Miistries agreed to launch ASEAN Trade Repository (ATR) as a portal that contains all regulations in ASEAN countries related to trade in November 2015.
ASEAN also agreed on the application of the live implementation of ASEAN Single Window (ASW) at the end of 2015. The ministries also underlined the importance of self-certification (Sertifikasi Mandiri) adopted in ASEAN and agreed on the extension period of implementation of pilot project of self-certification scheme until 2016.
“It gives maximum benefit to the businesses,” said Trade Minister, Thomas T.Lembong, optimistically. The ministers also expressed their support to the efforts of ASEAN to build a mechanism to increasingly discipline non-tariff barrier (NTBs) policies. One of them is done through the implementation of ASEAN Solutions for Investments, Service and Trade (ASSIST) project to speed up the process of resolving problems arising form the businesses. (E)
Business News - August 28, 2015