The respective trade ministers from the member-states of the Association
of Southeast Asian Nations (ASEAN) signed on
Sunday the landmark Regional Comprehensive Economic Partnership
(RCEP) free trade agreement (FTA).

“RCEP is set to be signed by trade ministers on Sunday during the
ASEAN Summit, with presence of leaders and heads of state,” Trade and
Industry Secretary Ramon Lopez told reporters on Saturday.

RCEP will also involve ASEAN’s major trading partners, namely Australia,
New Zealand, China, Japan and South Korea.

Early this year, the trade ministers from the 10 member-states of
ASEAN and the five countries vowed to conclude the RCEP amid
the coronavirus disease 2019 (Covid-19) pandemic.
India backed out of RCEP, fearing it would cripple its agriculture and
manufacturing sector.

“Although there are important long-term trade benefits that India would gain
from joining RCEP and having improved market access to most of the
major economies in the Asia-Pacific region, their immediate concern is that
rapidly dismantling trade barriers will hurt India’s industries, notably in
manufacturing,” IHS Markit chief economist for Asia-Pacific Rajiv Biswas
told the Philippines News Agency in an e-mail.

Biswas added that despite the withdrawal of India from RCEP, trade
between ASEAN and India can be boosted through ASEAN-India trade
liberalization initiatives.

However, there is ongoing tensions between India and China, who will be
part of RCEP, both in the economic and military fronts. Both countries have
thousands of troops and major military equipment cuurently stationed in the
Galwan Valley.

“A key concern that India has with the RCEP deal is that it would open up
the Indian market to severe competition from lower cost Chinese manufacturing exports.

Therefore, taking a bilateral approach to trade
liberalization with the other RCEP members, including ASEAN, Japan,
Australia and South Korea may be India’s preferred approach to trade
liberalization, at least in the near to medium term outlook,” Biswas said.

Since 2017, when the Philippines hosted that year’s ASEAN Summit, the
member-countries of the bloc were aiming to conclude the free trade
agreement.

RCEP covers one-third of the world’s population and one-third of global
gross domestic product and export market.

“This then offers wider market opportunities for our exporters and service
providers.

RCEP countries account for more than 50 percent of our export
market.

RCEP has improved levels of market access among each other,
but still respects exclusion list for sensitive products mostly for agriculture
products,” Lopez said.

He described the scope of RCEP as “more modern” and a “high quality
FTA” as this include economic technical topics such as micro, small and
medium enterprises, intellectual property, e-commerce, trade access, and
other topics in trade in products and services, as well as investments.

“The RCEP is a product of eight-year negotiation and this has been cleared
by our inter agency Committees at the NEDA (National Economic and
Development Authority) Board Cabinet Committee on Trade and related
Matters,” Lopez added. CURRENT PH