RCEP agreement could be new booster for regional development, say officials, scholars

The Regional Comprehensive Economic Partnership (RCEP) trade pact, once realized, will create the world's biggest free trade zone and serve as a new booster for regional development, Cambodian officials and experts have said.

The RCEP, initiated by the Association of Southeast Asian Nations (ASEAN) in 2012, is a proposed free trade agreement (FTA) between the 10 member states of ASEAN, namely Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, and their six ASEAN FTA partners -- China, Japan, South Korea, Australia, New Zealand and India.

During the 36th ASEAN Summit, held via video conference last month, ASEAN leaders welcomed the progress made for the full conclusion of the negotiations of the RCEP and looked forward to the signing of the deal by the end of 2020.

Cambodia's Commerce Ministry Secretary of State and Spokesman Seang Thay said when the agreement is signed, confidence in the regional framework will be further strengthened economically and politically as well as in other areas.

"For Cambodia, we want to see the RCEP free trade agreement be signed at the earliest possible time," he told Xinhua on Monday. "It will be a driving force to accelerate trade volume among the participating countries and will help rebuild economies in the region during the post-COVID-19 era."

The RCEP will provide the participating countries with greater market access, Thay said, adding that he believes that through it, relations in economy, trade and investment between ASEAN and their six FTA partners will be further broadened.

"Once signed, the RCEP will be the world's largest FTA by population. All countries will benefit from it," he said, adding that the pact will promote trade liberalization in the region.

The RCEP accounts for 45 percent of the world population, 40 percent of global trade and around one third of the world's gross domestic product (GDP).

As logistics systems, production and transport infrastructure in some countries are still not strong enough to compete in the RCEP, Thay said the China-proposed Belt and Road Initiative (BRI) can play a crucial role to help those countries address these matters.

Chheang Vannarith, president of the Asian Vision Institute, a think tank in Phnom Penh, said the RCEP would provide economic impetus for regional countries to bounce back together from the economic recession caused by the COVID-19 pandemic.

"It will send a clear signal that regional economic integration in Asia remains robust and vibrant although protectionism and unilateralism are on the rise in the United States and other regions," he told Xinhua.

He said the challenges lying ahead include how to convince people of the benefits deriving from the RCEP and how to empower and enable people and local small and medium-sized enterprises to fairly benefit from this regional trading arrangement.

Private corporations, especially small and medium-sized enterprises, must be enabled to grasp the benefits from the RCEP, he stressed.

Vannarith said that it is important to build synergy between the RCEP and other regional initiatives such as the BRI, adding that the BRI has been playing a vital role in strengthening regional infrastructure development and connectivity, which are the key elements to support trade and attract investment.

Mey Kalyan, senior advisor to the Supreme National Economic Council, said the RCEP will definitely have great importance at a time when the global economy is losing its balance due to the pandemic, protectionism and unilateralism.

"In the current context, the RCEP is extremely crucial for countries in the Asian region," he told Xinhua on Wednesday. "Asian countries have to stay together to survive and prosper, and it's a win-win situation to maintain and upgrade the RCEP system for a long-term benefit to all participating countries."

He said the RCEP will provide a lot of opportunities to Cambodia to boost its trade volume with other member countries. Meanwhile, he added, Cambodia has to work hard to seize these opportunities.

Kalyan said the BRI will help Cambodia develop a logistics system and infrastructure connectivity as well as accelerate industrialization so as to improve the kingdom's competitiveness in the future.

"The BRI is instrumental to connect participating countries with China, and within each country, hard and soft logistics have to be improved. For Cambodia, the country needs lots of improvement of its internal logistics," he said.

Joseph Matthews, senior professor at the BELTEI International University in Phnom Penh, said that there is no iota of doubt that the RCEP will be one of the most important regional free trade arrangements in the world.

"In my view, the RCEP will definitely be enlarged as it has potential and will act as a driving force to accelerate the trade volume within the ASEAN bloc and beyond," he told Xinhua on Tuesday.

He said that the RCEP partner countries need to act as beacons of open and inclusive regionalism and advocates of multilateralism, amid the COVID-19 pandemic and uncertainties caused by the rise of anti-globalization sentiment, protectionism, unilateralism and populism.

"ASEAN leaders have already taken a clear and united stand against the protectionist policy by forging ahead with deepening regional economic integration," Matthews said. "The retreat of the United States from the multilateral system has affected its role, influence, and image in the region."

He said that promoting an open and inclusive multilateral trading system, especially the conclusion of the RCEP, is critical to maintaining the dynamics of regional economic integration.

The professor added that the RCEP, once realized, will significantly contribute to the flow of goods and services in the region, but the biggest challenge would be infrastructure development in such countries as Cambodia, Laos, Vietnam and Myanmar.

"Here, the BRI can play a very important role in the bloc. Without effective communication and connectivity, the RCEP cannot flourish and economic potential cannot be utilized by partner countries," he said. "The BRI involvement in infrastructure development and enhancing the logistic capability of the region is a prerequisite for any further progress in the bloc."