Negotiators meeting
in Auckland, New Zealand, last week continued their efforts to finalise talks this year for a Regional Comprehensive Economic
Partnership (RCEP), a 16-country trade and investment deal in the Asia-Pacific region.
However, the pace
of the talks to date have led some observers to speculate that this process could
drag on past the end-2016 target.
The RCEP includes
all 10 members of the Association of Southeast Asian Nations (ASEAN), along with
six countries with whom ASEAN has an FTA – Australia, China, India, Japan, South
Korea, and New Zealand. Proponents of the deal say that the final accord would make
significant improvements on these existing “ASEAN+1” trade pacts.
The RCEP countries
account for almost a third of world GDP, at US$23 trillion, and 20 percent of global
services trade, while covering more than three billion people, according to New
Zealand government statistics.
The June round in
New Zealand brought together over 500 delegates, and included a public session for
civil society on the margins with New Zealand Minister of Trade Todd McClay and chief negotiator Mark Trainor,
along with consultations with business representatives on topics such as the technical
issues around non-tariff measures (NTM). Similar stakeholder events also took place
alongside an April gathering
in Perth, Australia.
Market access, draft texts
At the public session,
New Zealand officials confirmed that all RCEP countries have now submitted initial
offers both for goods and services trade, as well as initial lists of reservations
for investment.
On services, Trainor said last week that there is scope to improve market
access conditions for services providers, given that existing commitments in ASEAN
are relatively limited. Discussions over Mode 4 – those services commitments that
involve the movement of natural persons – also continue, with some countries showing
a strong interest and others presenting constraints given their immigration policies.
Meanwhile, talks
on investment liberalisation are following a negative
list approach, in which all industry sectors are open to investment unless specifically
deemed as closed.
Whether government
procurement will be included in a final RCEP deal is currently under discussion
in a sub-working group, with a final decision not yet confirmed. While it was not
listed in the original “guiding principles,”
that document does have a section on “other issues,” where topics that some RCEP
members have covered in other FTAs can be raised for possible discussion, and potentially
agreement.
Coming up
in August
Going forward, there
are RCEP rounds scheduled for August, October, and December 2016, while a trade
ministers’ meeting is slated for early August in Laos. Further negotiating rounds
might be added, given the goal of clinching a deal by year’s end, though McClay told the public session that this would likely be the
earliest for reaching a possible deal.
One complicating
factor is that not all participating countries have an FTA with their RCEP partners.
For example, there is no FTA between China and India, although both countries have
been considering a potential agreement since 2003. There is also no FTA between
China and Japan, although the China-Japan-Korea FTA is under negotiation.
As a result, RCEP
negotiations need not only to construct a large regional agreement but also build
FTA relationships that currently do not exist. Participating countries also have
different levels of economic development, which some say could further complicate
the proc.