The proposed Regional Comprehensive Economic Partnership (RCEP) trade deal could “reshape” the Association of Southeast Asian Nations’ (Asean) integration initiatives into a more committed and binding agreement, the Organization for Economic Cooperation and Development (OECD) said.
The OECD Development Centre’s “Economic Outlook for Southeast Asis, China and India 2018” released on Tuesday states that once finalized, RCEP “is poised to set a higher standard than the existing Asean-plus-one agreements”.
RCEP is a proposed trade deal that will cover Asean’s 10 member states and Australia, China, India, Japan, South Korea and New Zealand. It has been dubbed as an alternative to the Trans-Pacific Partnership, which has stumbled after the United States withdrew earlier this year.
RCEP negotiations were supposed to have ended this year but disagreements over tariffs have moved the deadline to next year.
The Centre noted that while the RCEP process was moving forward, with 19 rounds of negotiations already taken place to date, “stumbling blocks remain.”
“While most of the participating countries have existing FTAs (free trade agreements) with one another, some do not,” it noted.
“ More time will be needed for them to negotiate from scratch, and this will have an impact on the time needed to finalize the negotiations,” it added.
Another factor complicating the finalization process is the large number of countries involved and their level of development.
“While some countries prefer a simple manufacturing-oriented trade deal, other members are pushing for liberalization of the services sector and freedom of movement for skilled workers,” the Centre said.
Despite these challenges, it said the RCEP had the potential to be an inclusive agreement with a balanced agenda for growth in the area of trade liberalization and protection of both consumer and worker rights.
“To speed up finalization of the agreement, countries may wish to consider that a stricter and feasible deadline be incorporated into every negotiation,” it said.