Asia-Pacific Officials Lay Groundwork for High-Level Autumn Meetings
The coming months are due to see high levels of activity on trade in the Asia-Pacific, as different country coalitions work to make progress on their respective agendas for regional economic integration. This includes upcoming meetings of the Association of Southeast Asian Nations (ASEAN) and the Asia-Pacific Economic Cooperation (APEC) Forum, both of which have leaders’ summits scheduled in November.
Also in the spotlight are negotiations to finalise the Regional Comprehensive Economic Partnership (RCEP), along with the domestic ratification processes to bring the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP or TPP-11) into force.
ASEAN looks for deeper cooperation amid “global uncertainties”
As a regional intergovernmental organisation, ASEAN sets economic and trade integration objectives for a 10-country coalition: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.
Singapore, which chairs the grouping this year, has named among its priorities services integration and investment, energy security, greater trade with non-members, digital economy, and trade facilitation.
In a joint statement following an ASEAN economic ministers’ (AEM) meeting, held on 29 August, officials stressed the importance of the digital economy and e-commerce as a “long-term competitiveness” driver “amidst the threat of escalating trade tensions and continued global uncertainties.”
They also discussed further implementation of the ASEAN Economic Community Blueprint 2025, which was adopted in 2015. The document calls for achieving the following five goals by 2025: “(i) a highly integrated and cohesive economy; (ii) a competitive, innovative, and dynamic ASEAN; (iii) enhanced connectivity and sectoral cooperation; (iv) a resilient, inclusive, people-oriented, and people-centred ASEAN; and (v) a global ASEAN."
Experts warn that the ongoing trade tensions between the US and China could have implications for ASEAN members’ exports, given that some key regionally-produced goods such as electronics and machinery make up nearly one-fifth of the coalition’s exports to those countries, according to statistics cited by the Nikkei Asian Review. As a result, they say that this could hamper ASEAN’s efforts to achieve the ASEAN Economic Community Blueprint 2025 targets.
In addition, ASEAN members have also highlighted their interest in boosting connectivity with regional trade partners via the RCEP negotiations. The RCEP is a planned trade deal involving ASEAN members and six key trading partners, specifically Australia, China, India, Japan, New Zealand, and South Korea. The group’s members make up almost 40 percent of global GDP, therefore covering a significant portion of the world economy.
Negotiations for the ASEAN-led trade pact, whose membership overlaps partially with the CPTPP, were launched in November 2012, with officials holding 23 rounds of negotiations in the six years since.
Given that some RCEP economies are due to launch domestic electoral processes, ministers said in July that they hoped to boost their negotiating momentum in order to endorse a “package” of outcomes by year’s end. (See Bridges Weekly, 5 July 2018)
Singaporean Trade and Industry Minister Chan Chun Sing highlighted this objective at the ASEAN economic ministers’ meeting, saying on 1 September that while “broad agreement is in sight,” the RCEP members “must exercise shared and strong collective will and shoulder the common responsibility to bring negotiations to substantial conclusion by end-2018.”
RCEP ministers had met from 30-31 August in Singapore, in parallel with the ASEAN meet, to take stock of their progress to date. They also adopted “a package of year-end deliverables,” setting out targets for 2018, according to a joint media statement released at the event’s close.
Officials speaking to the Mainichi news outlet said that the package sets targets for reaching outcomes in goods and services market access, along with advances in other negotiating areas such as investment and intellectual property rights. However, reports indicate that several challenges remain in overcoming some negotiating red lines. The next round of the RCEP negotiations is slated for October this year, a few weeks before the ASEAN leaders’ summit in November.
In parallel, the CPTPP is undergoing ratification at the domestic level, with officials suggesting that the mega-regional accord could enter into force by next year if this pace continues. The two deals, while often compared given their overlapping membership and regional focus, have some significant differences in approach and focus. Experts have debated which accord may spur greater interest from international investors, and which one may be more likely to serve as a template for future trade rules in the broader Asia-Pacific region.
APEC officials look to advance trade and development targets
At another forum for Asia-Pacific economies, APEC senior officials met in Port Moresby, Papua New Guinea, from 19-20 August. Sources familiar with the meeting say that trade representatives made headway on implementation of the 2016 Lima Declaration on a Free Trade Area of the Asia-Pacific (FTAAP), trade in services, and trade facilitation. The senior officials meeting (SOM) was preceded by two weeks of meetings focused on trade.
The above-mentioned gatherings were also meant to set the stage for the upcoming APEC Ministers’ Meeting and APEC Economic Leaders’ Meetings, both of which are scheduled for November.
According to Ivan Pomaleu, who serves as Papua New Guinea’s Ambassador to APEC and was the SOM Chair, countries were able to reach “significant deliverables” when they met in late August. An APEC-published summary of his remarks said that participants worked “to take stock of APEC’s work, in relation to sustainable and inclusive resource development, identify emerging issues, assess potential impacts, and identify prospective work for the future in different sectors.”
APEC country officials discussed progress on the implementation of different initiatives related to export subsidies, transparency, and the realisation of a far-reaching accord that would link these 21 Pacific economies – the above-mentioned FTAAP. Officials also expressed support for a multilateral trading system and inclusive growth, and highlighted the role of digital economy and e-commerce, sources say.
Officials reportedly endorsed APEC cross-cutting principles on non-tariff measures, and are said to be looking to finalise non-binding principles for domestic regulation of the services sector. As for the digital economy and e-commerce, the main challenge for the coalition is how to implement the APEC Internet and Digital Economy Roadmap, which was adopted last year and has been a key discussion point in meetings since.
Overall, trade liberalisation and investment development will continue to be one of the main driving forces of the APEC region. Although the RCEP takes a different approach to some trade policy areas, relative to the CPTPP, some experts say that both mega-regional trade pacts could serve as useful starting points for a multilateral trade area, the FTAAP. According to a 2014 working paper published by the Asian Development Bank (ADB), these processes could help the region’s economy evolve from a “spaghetti bowl” of overlapping trade rules and regulations to a more structured system, which they refer to as a “jigsaw puzzle.”
Asia-Pacific economies have long said that boosting economic growth and facilitating trade is a top priority for their region, which has already seen economic growth overall multiply significantly since the APEC coalition was formed in 1989.
ICTSD reporting; “Economic priorities for Singapore as ASEAN chair,” THE STRAITS TIMES, 18 January, 2018; “US-China trade row spells pain and gains for ASEAN,” NIKKEI ASIAN REVIEW, 8 April, 2018; “India's steel ministry opposes inclusion of finished products in RCEP - Economic Times,” REUTERS, 21 August, 2018; “How An Australia-Canada-Japan Led TPP-11 Trade Deal Compares To China's Alternative,” FORBES, 13 March, 2018; “RCEP ministers OK package of deliverables to be reached by year-end,” THE MAINICHI, 1 September, 2018.