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While a few countries remained fixated over territorial disputes at the recent meetings of East Asian leaders in Phnom Penh, Cambodia, most nations are expecting broader cooperation on regional development.
Immediately after the conclusion of the Seventh East Asia Summit on November 20, leaders from 10 ASEAN nations and its six dialogue partners—China, South Korea, Japan, India, Australia and New Zealand—launched negotiations for the Regional Comprehensive Economic Partnership (RCEP), which officials say will allow a greater flow of goods and services and avoid a so-called “noodle bowl” of overlapping deals, even as countries in the region pursue bilateral and trilateral trade agreements. The RCEP is expected to go into effect by the end of 2015.
Critics noted that with a combined market of over 3 billion people and a combined GDP of about $20 trillion, the RCEP will become the world’s biggest regional free trade area (FTA) upon its completion. The potential FTA will certainly help maintain regional competitiveness and promote global economic growth. However, with some destabilizing factors present in the region and respective concerns of involved countries, barriers still lie ahead of comprehensive economic cooperation in East Asia.
A promising deal
The plan for the RCEP was first debated at the 19th ASEAN Summit in November 2011. Current world economic recovery efforts continue to be seriously challenged by the volatile global financial and economic situation. East Asian economies, which overly rely on trade with developed nations, have been jeopardized by the debt-laden Europe and the economically wobbling United States.
As the global trade environment continues to deteriorate, regional economic integration has become a better choice of ASEAN and its dialogue partners. The RCEP is therefore again on the agenda for leaders of regional countries to ease their reliance on the struggling West.
“At present, regional integration is accelerating worldwide. In the face of challenges posed by the current financial crisis, no country can stand alone. Cooperation and integration are the better choices,” said Xu Liping, a research fellow on Southeast Asian studies with the Institute of Asia-Pacific Studies at the Chinese Academy of Social Sciences. To a certain degree, the RCEP could be seen as the prototype of an Asian FTA, Xu added.
In fact, ASEAN has already established five FTAs respectively with China, South Korea, Japan, India and Australia-New Zealand.
However, Xu Ningning, Executive Secretary General of the Chinese Secretariat of the ChinaASEAN Business Council, said the RCEP has key differences from other trade agreements between ASEAN and its partners.
“The RCEP is aimed at attaining a comprehensive and mutually beneficial economic partnership agreement that involves deeper engagement than existing ASEAN FTAs,”said Xu.
According to Xu, besides establishing a higher-quality FTA in the region, the RCEP is also expected to help further entrench ASEAN centrality, which is challenged by the economic cooperation arrangements rapidly evolving in the region including the U.S.-led Trans-Pacific Partnership (TPP) and the prospective trilateral FTA among China, Japan and the South Korea.
“ASEAN would play a leading role in promoting the RCEP, which also aims to help the organization exert a bigger influence and acquire a greater say in the international arena. It will optimize ASEAN to be a more coherent economic bloc and resolve the ‘noodle bowl’ effect caused by the many current Asian trade agreements,” Xu said.
“Compared with the TPP, the RCEP is more easily accepted,” Xu said. The TPP requires a deeper extent of opening up while the RCEP is likely to adopt a gradual path in opening up member nations’ markets given that development gaps remain.
According to Xu, the RCEP is based on open accession, which would enable any of the ASEAN FTA partners to participate either from the outset or when they are ready to join at a later date. The arrangement is also open to other external economic partners.
The RCEP is expected to include economic and technical cooperation elements that would allow all parties, regardless of their level of development, to maximize the opportunities made available by deeper and broader economic engagements.
“With the region accounting for more than half of the global market and about a third of the global economic output, there is no doubt that a successful RCEP would significantly contribute to and boost global trade and investment,” said Surin Pitsuwan, Secretary General of ASEAN.
Barriers ahead
As all six dialogue partners in the region are supportive of ASEAN’s leading role in promoting the RCEP and a string of existing bilateral trade deals in the region, Xu believes there is a good basis for the establishment of the regional trade bloc.
But despite its advantages, some observers claimed that reaching the deal won’t be easy.
Zhang Jie, a researcher with the Institute of Asia-Pacific Studies at the Chinese Academy of Social Sciences, cautioned that some regional countries attempt to protect their sensitive sectors, such as Japan’s agriculture sector and South Korea’s rice industry. Moreover, regional security situations might become the largest factor affecting the expected establishment of the regional pact.
“Economic cooperation can be a good way to bridge differences, but the Philippines seemingly doesn’t want to shelve island disputes in the South China Sea,” said Zhang to Beijing Review.
When Cambodia, this year’s ASEAN chair, said at the latest ASEAN Summit in November that ASEAN nations had agreed not to “internationalize” the rifts over the South China Sea islands, Philippine President Benigno Aquino III blatantly rebuked Cambodian Prime Minister Hun Sen.
Japan also seems to have intentionally stirred up trouble from the sidelines as Prime Minister Yoshihiko Noda claimed that the South China Sea issue is of international concern.
Countries including the Philippines and Japan have provoked the topic of territorial disputes during the meetings of East Asian leaders in Phnom Penh, casting a shadow over regional economic cooperation, said Dong Manyuan, Vice President of the China Institute of International Studies.
“The deeds of those countries did not proceed from the overall interests and cooperation of the regional members but instead schemed to put their personal interests above the overall benefits of the region. It will surely affect deeper cooperation between the members,” Dong said.
China and ASEAN countries have held two rounds of talks in a bid to seal the Code of Conduct in the South China Sea. Meanwhile,“not to internationalize the South China Sea issue” is one of the principles written in the Declaration on the Conduct of Parties in the South China Sea, which was reached 10 years ago by China and ASEAN countries including the Philippines.
Dong said one of the reasons that some countries provoke territorial disputes is that certain East Asian countries set too high an expectation over Washington’s strategy of returning to the Asia-Pacific region. They are half-hearted in promoting economic cooperation in East Asia by making use of the Washington-led TPP as a kind of bargaining chip.
U.S. President Barack Obama didn’t forget to peddle its TPP during the ASEANorganized East Asia Summit. On the sidelines of the summit, the United States called a meeting of members of the TPP in an apparent effort to accelerate its own free trade talks.
During the summit, Chinese Premier Wen Jiabao expressed his wishes that concerted efforts should be made to seek cooperation in order for more countries to benefit from East Asia’s economic development.
“China welcomes the constructive efforts made by various countries to promote cooperation in East Asia and values the favorable conditions of peace, stability, prosperity and development in the region,” Wen said. China disapproves of any attempt at the summit to highlight territorial and maritime disputes and exaggerate the tense atmosphere, he added.
Dong echoed the premier’s view. He said regional countries should shelve their differences to deepen cooperation in various fields and promote the establishment of the RCEP—moves that will enhance the whole region’s capacity for sustainable development.
Immediately after the conclusion of the Seventh East Asia Summit on November 20, leaders from 10 ASEAN nations and its six dialogue partners—China, South Korea, Japan, India, Australia and New Zealand—launched negotiations for the Regional Comprehensive Economic Partnership (RCEP), which officials say will allow a greater flow of goods and services and avoid a so-called “noodle bowl” of overlapping deals, even as countries in the region pursue bilateral and trilateral trade agreements. The RCEP is expected to go into effect by the end of 2015.
Critics noted that with a combined market of over 3 billion people and a combined GDP of about $20 trillion, the RCEP will become the world’s biggest regional free trade area (FTA) upon its completion. The potential FTA will certainly help maintain regional competitiveness and promote global economic growth. However, with some destabilizing factors present in the region and respective concerns of involved countries, barriers still lie ahead of comprehensive economic cooperation in East Asia.
A promising deal
The plan for the RCEP was first debated at the 19th ASEAN Summit in November 2011. Current world economic recovery efforts continue to be seriously challenged by the volatile global financial and economic situation. East Asian economies, which overly rely on trade with developed nations, have been jeopardized by the debt-laden Europe and the economically wobbling United States.
As the global trade environment continues to deteriorate, regional economic integration has become a better choice of ASEAN and its dialogue partners. The RCEP is therefore again on the agenda for leaders of regional countries to ease their reliance on the struggling West.
“At present, regional integration is accelerating worldwide. In the face of challenges posed by the current financial crisis, no country can stand alone. Cooperation and integration are the better choices,” said Xu Liping, a research fellow on Southeast Asian studies with the Institute of Asia-Pacific Studies at the Chinese Academy of Social Sciences. To a certain degree, the RCEP could be seen as the prototype of an Asian FTA, Xu added.
In fact, ASEAN has already established five FTAs respectively with China, South Korea, Japan, India and Australia-New Zealand.
However, Xu Ningning, Executive Secretary General of the Chinese Secretariat of the ChinaASEAN Business Council, said the RCEP has key differences from other trade agreements between ASEAN and its partners.
“The RCEP is aimed at attaining a comprehensive and mutually beneficial economic partnership agreement that involves deeper engagement than existing ASEAN FTAs,”said Xu.
According to Xu, besides establishing a higher-quality FTA in the region, the RCEP is also expected to help further entrench ASEAN centrality, which is challenged by the economic cooperation arrangements rapidly evolving in the region including the U.S.-led Trans-Pacific Partnership (TPP) and the prospective trilateral FTA among China, Japan and the South Korea.
“ASEAN would play a leading role in promoting the RCEP, which also aims to help the organization exert a bigger influence and acquire a greater say in the international arena. It will optimize ASEAN to be a more coherent economic bloc and resolve the ‘noodle bowl’ effect caused by the many current Asian trade agreements,” Xu said.
“Compared with the TPP, the RCEP is more easily accepted,” Xu said. The TPP requires a deeper extent of opening up while the RCEP is likely to adopt a gradual path in opening up member nations’ markets given that development gaps remain.
According to Xu, the RCEP is based on open accession, which would enable any of the ASEAN FTA partners to participate either from the outset or when they are ready to join at a later date. The arrangement is also open to other external economic partners.
The RCEP is expected to include economic and technical cooperation elements that would allow all parties, regardless of their level of development, to maximize the opportunities made available by deeper and broader economic engagements.
“With the region accounting for more than half of the global market and about a third of the global economic output, there is no doubt that a successful RCEP would significantly contribute to and boost global trade and investment,” said Surin Pitsuwan, Secretary General of ASEAN.
Barriers ahead
As all six dialogue partners in the region are supportive of ASEAN’s leading role in promoting the RCEP and a string of existing bilateral trade deals in the region, Xu believes there is a good basis for the establishment of the regional trade bloc.
But despite its advantages, some observers claimed that reaching the deal won’t be easy.
Zhang Jie, a researcher with the Institute of Asia-Pacific Studies at the Chinese Academy of Social Sciences, cautioned that some regional countries attempt to protect their sensitive sectors, such as Japan’s agriculture sector and South Korea’s rice industry. Moreover, regional security situations might become the largest factor affecting the expected establishment of the regional pact.
“Economic cooperation can be a good way to bridge differences, but the Philippines seemingly doesn’t want to shelve island disputes in the South China Sea,” said Zhang to Beijing Review.
When Cambodia, this year’s ASEAN chair, said at the latest ASEAN Summit in November that ASEAN nations had agreed not to “internationalize” the rifts over the South China Sea islands, Philippine President Benigno Aquino III blatantly rebuked Cambodian Prime Minister Hun Sen.
Japan also seems to have intentionally stirred up trouble from the sidelines as Prime Minister Yoshihiko Noda claimed that the South China Sea issue is of international concern.
Countries including the Philippines and Japan have provoked the topic of territorial disputes during the meetings of East Asian leaders in Phnom Penh, casting a shadow over regional economic cooperation, said Dong Manyuan, Vice President of the China Institute of International Studies.
“The deeds of those countries did not proceed from the overall interests and cooperation of the regional members but instead schemed to put their personal interests above the overall benefits of the region. It will surely affect deeper cooperation between the members,” Dong said.
China and ASEAN countries have held two rounds of talks in a bid to seal the Code of Conduct in the South China Sea. Meanwhile,“not to internationalize the South China Sea issue” is one of the principles written in the Declaration on the Conduct of Parties in the South China Sea, which was reached 10 years ago by China and ASEAN countries including the Philippines.
Dong said one of the reasons that some countries provoke territorial disputes is that certain East Asian countries set too high an expectation over Washington’s strategy of returning to the Asia-Pacific region. They are half-hearted in promoting economic cooperation in East Asia by making use of the Washington-led TPP as a kind of bargaining chip.
U.S. President Barack Obama didn’t forget to peddle its TPP during the ASEANorganized East Asia Summit. On the sidelines of the summit, the United States called a meeting of members of the TPP in an apparent effort to accelerate its own free trade talks.
During the summit, Chinese Premier Wen Jiabao expressed his wishes that concerted efforts should be made to seek cooperation in order for more countries to benefit from East Asia’s economic development.
“China welcomes the constructive efforts made by various countries to promote cooperation in East Asia and values the favorable conditions of peace, stability, prosperity and development in the region,” Wen said. China disapproves of any attempt at the summit to highlight territorial and maritime disputes and exaggerate the tense atmosphere, he added.
Dong echoed the premier’s view. He said regional countries should shelve their differences to deepen cooperation in various fields and promote the establishment of the RCEP—moves that will enhance the whole region’s capacity for sustainable development.