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Larger the scale, bigger the problem for RCEP

China Daily | Updated: 2018-08-03 07:47
MA XUEJING/CHINA DAILY

Editor's Note: A series of meetings among the foreign ministers of ASEAN and some other countries, including China, between Thursday and Sunday has drawn wide attention. But since protectionism poses a threat to free trade, ASEAN and China, Japan, the Republic of Korea, Australia, New Zealand and India should expedite the process to reach a final deal on the Regional Comprehensive Economic Partnership. Two experts share their views on the RCEP's prospects with China Daily's Pan Yixuan. Excerpts follow:

FTA encounters new challenges

Free trade has been facing many challenges since the 2008 global financial crisis, especially since the United States pulled out of the Trans-Pacific Partnership agreement last year.

Since many countries now have to make much greater efforts to tackle their domestic economic problems, the mode and development of FTAs could change in the future. Moreover, the imbalanced global development could prompt countries to not agree to open their markets beyond a certain extent even for long-term development of multilateral cooperation. For instance, countries in different stages of development will agree to open their markets to different extents to insulate their economies against the negative impact of open and free trade.

The Association of Southeast Asian Nations proposed the RCEP for better regional development, through the signing of FTAs with China, Japan, the ROK, Australia, New Zealand, and India. And although external pressure on the RCEP negotiators decreased after the US' withdrawal from the TPP, their internal disputes over free trade rules increased. For instance, Japan has set high-quality trading terms such as strengthened patent protection for market access, which several RCEP countries may not accept.

Given the rising wave of protectionism that started in the US, the RCEP goals seem to have changed from what they were during the high tide of economic globalization. As a result, it is not easy for the RCEP countries to reach even a basic agreement on issues such as proper market access, phased opening-up and common negative list. So the RCEP countries should realize they are more likely to reach a deal to defend multilateral trade purely for economic reasons, rather than to achieve political goals.

Zhang Yunling, director of international studies at the Chinese Academy of Social Sciences, Beijing

Coordination is what boosts cooperation

Although the RCEP countries have equal negotiation rights, some have mistaken China as the leader. The leadership role in a multilateral trade mechanism is not decided by the size of an economy, albeit China, as the largest RCEP economy, has been shouldering a larger proportion of the responsibilities.

The RCEP countries share the goal of reducing trade barriers and expanding the market for regional economic development. Yet they have not been able to agree to a trade deal due to certain obstacles. Besides, not all the RCEP nations seem determined to sign a comprehensive and effective trade agreement. And without a broad agreement, the RCEP countries cannot fully capitalize on the regional market that accounts for 45 percent of the global population and 30 percent of world trade.

The strong opposition against US protectionism may be a good opportunity to expedite the RCEP negotiations to reach a comprehensive FTA. For example, Japan, a disappointed US ally that used to focus on the US-led TPP, would like to play an important role in the RCEP negotiations, in order to seek multilateral cooperation and counter US protectionism and unilateralism. As a developed economy, Japan can help boost regional trade, especially if the RCEP nations initially focus on economic cooperation to deal with US protectionism, instead of forming a joint front to counter the US trade policies.

Given the economic power a full-fledged RCEP will have, the negotiations should continue based on equality and equity. And when the final RCEP agreement is put into practice, it should be on the basis of shared benefits in multilateral cooperation.

Yang Mian, a professor at the Institute of International Relations, Communication University of China, Beijing

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