Good prospects for RCEP to wrap up negotiations this year

Leaders at the 27th Asean Summits posing for a photo after a joint statement on the regional comprehensive economic partnership negotiations in Kuala Lumpur, Sunday, November 22, 2015. From left are Australia's Prime Minister Malcom Turnbull, Brunei's Sultan Hassanal Bolkiah, Cambodia's PM Hun Sen, India's PM Narendra Modi, Indonesia's president Joko Widodo, Japan's PM Shinzo Abe, Laos PM Thongsing Thammavong, Myanmmar's president U Thein Sein, Malaysia's Prime Minister Najib Razak, China's PM Li Keqiang, New Zealand's PM, John Key, Philippine's president Benigno S. Aquino III, Republic of Korea's president Park Geun-hye, Singapore's PM Lee Shien Loong, Thailand's PM General (rtd) Prayut Chan-o-Cha and Vietnam's PM Nguyen Tan Dung. RAJA FAISAL HISHAN/The Star.

KUALA LUMPUR: The Regional Comprehensive Economic Partnership (RCEP), involving 16 countries including Malaysia, has good prospects to wrap up negotiations in 2017, said HSBC Bank plc.

The bank’s senior trade economist, Dr Douglas Lippoldt, said the leading policymakers in RCEP member countries had stressed the importance of an early completion of the talks following additional rounds planned this year. 

“I think we have prospects of seeing the agreement concluded, hopefully this year, but it is not in near or medium term as I see it feasible to complete the negotiations with the kind of goodwill the ministers have been expressing with this accord,” he said in a conference call on Trade Prospect for Asia on Thursday.

The 16 countries -- Asean 10 and its six dialogue partners (Japan, India, China, New Zealand, Australia and South Korea) - missed the deadline of concluding negotiations twice in 2015 and last year.

To-date officials have held 16 rounds of negotiations with the last one in Indonesia in December 2016. They are expected to meet again in Japan next month.

Lippoldt said there were developments in recent round of negotiations with breakthrough on tariffs following plans to liberalise 80% of the tariffs in the region. 

“India, for example, has been calling for a tiered-system of deeper cuts being made for the mid- to less-developed countries in the group and less liberalisation for more competitive countries,” he said. 

The RCEP would offer a prospect of a new Asian trade deal on a huge scale, covering nearly 50% of global population, he said.

“We see countries like Brunei, Vietnam, South Korea and Malaysia will have income gains of three per cent or more from the RCEP in terms of annual output and annual gross domestic product,” he said.

On the Trans-Pacific Partnership Agreement, Lippoldt hoped the US would revisit the pact although president-elect Donald Trump has decided to withdraw the country’s participation.

“The negotiations are done and the package has been signed, it is on the table and ready for ratification. 

“For me, this is a low hanging fruit, that could add a stimulus to the global economy at the time when we are not quite sure where the stimulus is going to come from,” he said. - Bernama