Published: Wednesday August 26, 2015 MYT 12:00:00 AM
Updated: Wednesday August 26, 2015 MYT 7:33:18 AM

Proposed RCEP gains momentum after KL-Asean economic ministers meet

Yesterday was the last day of the 47th Asean Economic Ministers Meeting. It has been a long week for the host, International Trade and Industry (Miti) Minister Datuk Seri Mustapa Mohamed, and his officials to organise an event that takes place every 10 years.

A few bites of food, several sips of coffee and it was a short dash for Mustapa and his Miti team to chair another meeting. Mustapa has been working hard and may have lost some weight because even his suit looked loose on him.

Monday was an extremely difficult day for the Miti team.

Malaysia as the Asean chair this year decided to hold the Regional Comprehensive Economic Partner­ship (RCEP) meeting at ministerial level, only the third one at ministerial level since negotiations started three years ago.

RCEP involves the 10 Asean member nations and six free trade agreement (FTA) partners, namely Australia, China, India, Japan, New Zealand and South Korea, and is considered a major platform to forge closer economic integration by removing barriers to trade and investments in the participating countries.

No one wanted to say it openly but the truth is, RCEP negotiations at official level have not made much headway for a long time.

For the Malaysian Government which is currently involved in negotiations for two major free trade agreements, both the RCEP and the Trans-Pacific Partnership are equally important.

But all was not well when RCEP negotiations lagged behind the TPP, though the latter has more negative perception from the public.

The TPP is US-led and if concluded, would create a free trade bloc stretching from Japan to Chile, covering 40% of the world economy. Four of 12 TPP countries are Asean members.

This time around, Miti decided to take the leading role since the last official meeting in Naypyidaw three weeks ago came almost to naught, and it was agreed that the ministers would thrash it out in Kuala Lumpur this week.

With all the uncertainties of where RCEP negotiations are heading, officials were feeling edgy all week.

Barely 15 minutes after the meeting started, Asean officials brought out their counterparts from Japan and China from the meeting room to convince them to make some concessions in order to move forward with the negotiations.

Japan is widely known for jealously guarding its agriculture sector and has been reluctant to make concessions. Unlike other RCEP countries, Japan and China do not have bilateral trade agreement.

It is learnt that what was supposed to be a 15-minute chat stretched past an hour but once convinced, they went back into the room to meet other waiting RCEP countries.

“We took Japan and China out. China was willing to make a big concession with the condition that Japan opens up its agriculture sector. That was the deadlock. When we went back in, South Korea could not agree on formulation,” said an official.

But an Asean official said that while he understood South Korea’s concern, the breakout meeting was necessary.

“The breakouts are just to seek compromise, look at the language, listen to their concerns because this is a national position which we cannot override,” said an official familiar with the deal.

It was tough but in the end, all countries agreed to finalise the modalities for the goods sector to meet the aspiration to eliminate tariff up to 80% in 10 years from the 65% when the RCEP eventually comes into force.

“I think this is one of the good outcomes of this RCEP meeting. The ministers have shown that they have the collective will to move the negotiation process forward.

“It has unlocked the difficulties officials had in finalising the modalities. This will allow officials to progress with their technical discussion and details,” said another official who said modalities for investment and services had all been finalised.

“We don’t need ministers’ intervention now.

“We will submit our offers and our reservations. For example, on investment, countries will have to submit their reservation lists and their initial offers.

“All this is being done. Before that, we could not do it because of the uncertainties of the agreement on modalities,” the official added.

Officials will now meet in Busan, South Korea, in October.

“Now we can progress faster. Different working groups can meet at different times,” said an official.

It has been a good week after the initial trepidation.

Miti officials deserve a pat on the back. They proved that they can lead during this Asean chairmanship year for Malaysia and guide the many related meetings that took place to conclude on a positive note.

The views expressed are entirely the writer’s own.

Tags / Keywords: ASEAN, Mustapa Mohamed, RCEP, Asean, Malaysia, Government

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