Asia-Pacific Roundup: Japan, ASEAN Meeting, Australia-India FTA Update
The past week has seen various meetings on advancing regional integration projects in the Asia-Pacific, including a new round of talks between China, South Korea, and Japan on a trilateral trade deal; a leaders’ level gathering on a planned Australia-India agreement; and a meeting between officials from Japan and the Association of Southeast Asian Nations (ASEAN).
Japan, ASEAN talk RCEP
How to advance talks for a Regional Comprehensive Economic Partnership (RCEP) was in focus during a meeting of the economic ministers of Japan and ASEAN, who met last week with a view to boosting trade-related cooperation.
The 6-9 April meeting took place within the context of the ASEAN Economic Ministers (AEM) Roadshow, with visits to the Japanese cities of Tokyo, Kyoto, Osaka, and Wakayama.
In an effort to bolster multilateral cooperation and growth, ministers expressed their interest in seeing a “swift conclusion” of the RCEP, a planned trade accord that would include the 10 members of ASEAN and its six free trade agreement (FTA) partners – Australia, China, India, Japan, New Zealand, and South Korea. (See Bridges Weekly, 16 March 2017)
“The ministers shared the view that, in the headwinds against globalisation, it is imperative for a modern, comprehensive, high quality, and mutually beneficial RCEP to be a model for inclusive and innovation-oriented growth,” read a joint statement from the group.
The statement referred to the ministers’ emphasis for RCEP “to deliver high quality and commercially meaningful outcomes, not only on trade in goods, trade in services, and Investment, but also in trade facilitating rules (e.g. customs procedures, e-commerce, and intellectual property).”
Japan's Minister of Economy, Trade and Industry, Hiroshige Seko, told reporters afterward that “the RCEP is key to stopping the protectionist tide. We have managed to come to an agreement to seek a quality agreement [to establish the RCEP]. This is a major step.”
No firm deadline has been outlined for the accord’s conclusion, after previous efforts to reach a deal last year failed to bear fruit. The countries involved have held 17 negotiating rounds since RCEP was launched in November 2012.
Following last week’s meeting, Japanese and ASEAN ministers stated that their countries would have deeper discussions on the topic at a ministerial meeting in Manila in September. The next round of RCEP negotiations is planned for early May, also in the Philippines.
Australia-India trade talks
Meanwhile, Australian Prime Minister Malcolm Turnbull suggested this week that a planned trade deal with India could take longer than originally envisioned, following a state visit to the Asian economy this week to meet with Prime Minister Narendra Modi.
Negotiations for the Australia-India deal have been underway since May 2011. These talks, launched under former Australian Prime Minister Julia Gillard and former Indian Prime Minister Manmohan Singh, were previously expected to be completed by the end of 2015. (See Bridges Weekly, 7 April 2016)
Turnbull, however, has lately suggested that a “realistic” timeframe may be longer than originally envisioned, stating that concluding a deal is nevertheless still “on the agenda.”
“There is no point setting a target for an agreement without having regard to the quality of an agreement. You can sign an agreement anytime, it’s a question of whether it’s got the provisions that make it valuable and worthwhile from Australia’s point of view,” said the Australian statesman.
Turnbull flagged agriculture and migration policies as particularly complex for the realisation of a free trade pact. On farm trade, Australia is hoping to see greater market access from India. On immigration, Australia has said that additional liberalisation will depend on need, with Turnbull saying that the priority is that “where jobs can be done by Australians, they’re done by Australians.”
"We see our temporary migration program as being conducted in a very focused way in Australia's national interest," said Turnbull.
Although acknowledging the need to move forward with talks on a potential Canberra-New Delhi trade partnership, the Australian leader said that his priority would be concluding the larger RCEP deal.
“The big agenda in terms of trade in the region now is RCEP and that’s I think the priority that the ASEAN countries, India, Australia, and China, and others are giving today,” said Turnbull.
Echoing the potential of the sweeping regional trade accord, a joint statement by both prime ministers stated that “RCEP can provide a boost to regional economic confidence in a time of global uncertainty – but to do so it needs to deliver commercially meaningful outcomes for business.”
Australia-India bilateral trade in both goods and services reached nearly A$20 billion (US$15 billion) last year, which is more than twice as much as it was a decade ago. However, Turnbull acknowledged in a press statement that “given the complementarities of our two economies, this is a fraction of the level it could and should be.”
China-Japan-South Korea resume trilateral talks
Meanwhile, the twelfth round of negotiations on a potential FTA among Japan, China, and South Korea is taking place this week.
During the 10-13 April round in Japan, trade in goods and services as well as investment, e-commerce, and intellectual property will be on the table, officials say.
The China-Japan-South Korea FTA discussions were launched in November 2012, and in 2015 the parties jointly agreed to accelerate negotiations over the potential pact after a long stall. (See Bridges Weekly, 5 November 2015)
The struggles seen in trying to yield any substantial negotiating progress has been attributed to territorial and historical issues among the three Asian states.
Although headway on the potential accord has been slow, Chinese Foreign Minister Wang Yi stated in a speech at a luncheon of the China Development Forum last month that Beijing is “willing to help China-Japan-[South Korea] cooperation to overcome obstacles, build consensus and move toward the goal of realizing an East Asia economic community by 2020.”
The conclusion of the potential trilateral FTA would result in one of the world’s biggest free trade blocs with a combined gross domestic product of US$16.7 trillion.
ICTSD reporting; “Japan, ASEAN to speed up talks on RCEP,” NIKKEI ASIAN REVIEW, 9 April 2017; “Asean-Japan ministers to strengthen cooperation,” THE MANILA TIMES, 10 April 2017; “Australian PM, in India, pushes bilateral, regional trade agenda,” REUTERS, 10 April 2017; “New trade deal with India could be years away, Malcolm Turnbull says,” ABC NEWS, 10 April 2017; “India-Australia joint statement: PM Narendra Modi, PM Malcolm Turnbull say committed to CECA,” FINANCIAL EXPRESS, 11 April 2017; “S. Korea, China, Japan to hold new round of free trade talks,” YONHAP NEWS, 9 April 2017.