Australian economist sees RCEP key trade deal amid global economic uncertainty

Source: Xinhua| 2021-11-09 16:35:27|Editor: huaxia

The signing ceremony of the Regional Comprehensive Economic Partnership (RCEP) agreement is held via video conference in Hanoi, Vietnam, Nov. 15, 2020. (VNA via Xinhua)

The RCEP agreement could ultimately facilitate collective Asian leadership, ASEAN centrality, and strengthen the ASEAN institutional ecosystem and its dealings "with those outside it, like the United States and Europe."

CANBERRA, Nov. 9 (Xinhua) -- The Regional Comprehensive Economic Partnership (RCEP) free trade agreement is important amid global economic uncertainty at the current time, said a renowned Australian economist.

"East Asia's RCEP agreement was concluded in a time of heightened uncertainty in the global economy and in the middle of the largest economic downturn in almost 100 years from a pandemic-induced recession," said Peter Drysdale, Emeritus Professor of Economics and Head of the East Asian Bureau of Economic Research at the Australian National University, told Xinhua in an interview.

As of last Tuesday, the ASEAN Secretariat has received instruments of ratification/acceptance (IOR/A) from six ASEAN member states -- Brunei, Cambodia, Laos, Singapore, Thailand and Vietnam -- as well as from four non-ASEAN signatory states -- China, Japan, New Zealand and Australia.

As provided by the agreement, RCEP will enter into force 60 days after the date at which the minimum number of IOR/A is achieved, which means that the world's largest free trade deal covering about 30 percent of the world's population shall enter into force on Jan. 1, 2022. Its economic and trade volume also accounts for 30 percent of the world's total.

People attend the eighth Regional Comprehensive Economic Partnership (RCEP) Ministerial Meeting via video conference in Hanoi, Vietnam on Aug. 27, 2020. (VNA via Xinhua)

Professor Drysdale noted that the agreement is even more important in the context of rising protectionism, trade dispute between China and the United States, and the protectionist pressure arising from the COVID-19 pandemic that "have put the global trade regime under extreme pressure".

Given its size which is more than twice that of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in terms of the scale of the economies involved and trade volume, the professor saw it beyond a trade arrangement.

"It is an economic cooperation arrangement, as it incorporates elements which will see the partners continuing to deepen the economic integration," he said.

He believed that RCEP represents a big commitment to economic liberalization, allowing developing economies in the arrangement to phase in their liberalization over periods of time, while ensuring an endpoint of substantial liberalization and recognizing the wide range of economic development and market conditions found in member economies.

Professor Drysdale said the RCEP provisions on government procurement, intellectual property and the digital economy signal the willingness of member economies to commit to a shared "rule book" for emerging areas of trade despite bilateral disagreements and intersecting FTAs.

In terms of market access, RCEP will eliminate most tariffs and quotas, and liberalize service trade, he added.

The cooperation framework offers opportunities not only to help members make progress "in areas that are not suited to negotiation such as cooperation on recovery from the coronavirus pandemic and the regulation of the increasingly important digital economy," but also on broader regional and global issues such as regional infrastructure investment and climate change policies.

Therefore, Drysdale said it is not simply another free trade and investment arrangement. "It incorporates an important cooperation agenda, an essential element in building capacity for economic reform and mutually reinforcing regional development in Southeast Asia over time," he said.

While recognizing developing the agenda for cooperation in RCEP as the major challenge now, "the cooperation agenda has a political and security pay-off that will assist in ameliorating regional tensions and managing relations with bigger powers," he said.

People visit the 18th China-ASEAN Expo in Nanning, capital of south China's Guangxi Zhuang Autonomous Region, Sept. 13, 2021. (Xinhua/Liu Lingyi)

According to him, the RCEP agreement could ultimately facilitate collective Asian leadership, ASEAN centrality, and strengthen the ASEAN institutional ecosystem and its dealings with those outside it, like the United States and Europe.

As he expressed the expectations for RCEP, Professor Drysdale saw the upcoming Asia-Pacific Economic Cooperation (APEC) Economic Leaders' Meeting, to be hosted virtually by New Zealand this week, as another opportunity in a difficult time.

He has been involved in the regional economic cooperation process before APEC was born. His students gave him a car plate that reads "APEC Daddy", a tribute to his works which were recognized as the intellectual foundation of APEC.

New Zealand Minister for Trade and Export Growth Damien O'Connor (R) chairs the 2021 APEC Ministerial Meeting in Wellington, New Zealand, Nov. 9, 2021. (Xinhua)

"APEC is more important now than it ever has been because there are big issues that need to be worked through to strengthen and stabilize global governance," he said.

For him, APEC is ideally suited to enable different perspectives to be discussed outside the pressure of negotiation and solutions to be found in the development of policy strategies.

"Its multilateral character and the participation of both China and the United States in its multilateral deliberations is a huge strength that APEC can use if the will is there," he added.