RCEP Negotiators Set Groundwork for November Leaders’ Summit

2 November 2017

The 20th round of negotiations for the Regional Comprehensive Economic Partnership (RCEP) concluded in Incheon, South Korea last week, where delegates sought to build convergence on remaining issues ahead of a pivotal leaders’ meeting in November.

Several hundred delegates convened over various days of discussion in what represented the final scheduled RCEP negotiating round of the calendar year.

Talks were meant to pave the way for a high-level leaders’ summit due to take place in the Philippines on 17 November, on the sidelines of the 31st Leaders’ meeting of the Association of Southeast Asian Nations (ASEAN). According to a statement from China’s Ministry of Commerce, negotiators were putting together a draft “joint assessment” to forward to their leaders for review this month.

The potential agreement would unite 16 nations in the Asia-Pacific in a massive trading bloc, including the 10 ASEAN member states, in addition to China, India, Japan, Korea, Australia, and New Zealand. The latter six countries are ASEAN’s FTA partners.

Covering a third of the global economy, with a combined GDP of US$23.8 trillion, and half of the world’s population, ministers “underscored the immense potential for the RCEP to serve as an engine for global growth” and the need to ensure that “RCEP is inclusive and beneficial to all stakeholders” in a joint statement issued by RCEP ministers in September.

In addition, 30 percent of the volume of global trade would fall under the deal, including major emerging markets with significant potential for growth.

The agreement involves some of the same countries as the Trans-Pacific Partnership, negotiations for which were recently renewed following US withdrawal from the pact. Those talks are also preparing for a key leaders’ meeting this month in Vietnam. (See Bridges Weekly, 26 October 2017).

On the occasion of the fifth RCEP Ministerial Meeting, held in the Philippines in September, officials pressed for political commitments to be translated into action and agreed to “make utmost effort to achieve significant outcomes of the RCEP by end of 2017 to bring the negotiation closer to its successful conclusion,” according to the joint statement.

Negotiators have kept 2017 as a target, a year of particular significance as the 50th anniversary of ASEAN’s establishment, though some officials have lately suggested that the talks could go into next year given the nature of the differences that remain.

Towards this end, ministers agreed in September on the RCEP Key Elements for Significant Outcomes by the End of 2017, after which negotiators structured discussions in Incheon to support a process of narrowing “landing zones” on topics where agreement can be reached. Progress in this regard will be transmitted to the leaders’ summit in November.

The previous round of negotiations took place from 24- 28 July 2017 in Hyderabad, India. (See Bridges Weekly, 3 August 2017)

Topics under discussion

The deal aims to cover trade in goods and services, investment, competition policy, intellectual property rights, and e-commerce under its ambit, among other topics, such as provisions for dispute settlement.

The 20th round of talks put market access negotiations on trade in goods and services, rules of origin, intellectual property, and e-commerce high on the agenda, according to the Chinese Ministry of Commerce.

The RCEP talks are now in their fifth year, with certain key issues still out of reach as countries strive to find a balance between differing interests. For example, participants have not yet agreed on the degree of market access and must still determine the final number of tariff lines on which RCEP participants would slash duties.

South Korean Trade Minister Kim Hyun-chong underlined the “need to look for a pragmatic solution that will take into account each nation’s specific characteristics” during his opening address as the round’s host, according to comments reported in the Hankyoreh.

India has reportedly proposed staggered time periods for certain tariff cuts, citing concerns for some domestic industries, as well as tiered cuts to tariffs, with the highest cuts granted to ASEAN economies. The south Asian nation has also pushed for greater market access in the services sector, particularly in terms of temporary movement of professionals.

Civil society reactions

The RCEP deliberations concerning intellectual property rights have particularly garnered close scrutiny in terms of their potential public health implications, especially from civil society groups who fear that provisions in the agreement could hamper global access to affordable generic medicines.

Groups such as Médecins Sans Frontières (MSF) have voiced concerns with proposals on the table pertaining to data exclusivity and extended patent terms, which they say could make it tougher to produce lower-cost products and make it harder for newer manufacturers in India to enter the pharmaceuticals market.

“The balance between public health and the intellectual property regime seems to be broken,” said Thierry Coppens, General Director of MSF Korea, according to an MSF press release. “Protection of unmerited intellectual property is blocking development and introduction of new and affordable quality drugs and vaccines.”

ICTSD reporting; “India Will Not Cross Red Lines on Generic Drugs in RCEP, but Stay Vigilant, Say Officials,” THE WIRE, 24 October 2017; “India to oppose anti-generics proposals at RCEP meet,” LIVEMINT, 25 October 2017; “Trade ministers in Asia-Pacific to gather for RCEP talks,” YONHAP, 23 October 2017; “20th round of Regional Comprehensive Economic Partnership negotiations opens in Songdo,” THE HANKYOREH, 29 October 2017; “RCEP deal unlikely this year: South Korean official,” NIKKE ASIAN REVIEW, 27 October 2017; “RCEP trade ministers from India & other countries to meet in Manila in mid-November,” THE ECONOMIC TIMES, 31 October 2017.  

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