With a combined GDP of $22.4 trillion and a total population of 3.5 billion between all 16 RCEP Participating Countries (RCP), RCEP is set to be the largest economic bloc in the world with a vast potential to be an economic powerhouse, both regionally and globally.
Director-General of International Trade Negotiations, Mr. Iman Pambagyo joined FPCI Public Discussion to discuss RCEP negotiations. He provided invaluable insight on the progress that has been made and remaining challenges RCEP faces as it reaches its sixth and hopefully, last year of negotiations.
Mr. Pambagyo spoke optimistically about RCEP, describing 2018 as the most productive year of negotiations thus far. Out of RCEP’s 29 components, 7 chapters have been concluded, 2 are technically concluded, 3 are soon to be concluded, and 17 require further negotiations.
Negotiating the three pillars of RCEP (market access, rules and text, and cooperation) has required collaboration between a broad range of parties including the Trade Negotiating Committee (TNC), 9 working groups, 7 sub-working groups, the 16 RCP and various stakeholders from the business sector, civil society, and academia. Coordinating such a large-scale multilateral trade agreement inevitably raises complex issues. While 89 out 225 pairing between RPC gave the green light for negotiations on market access, Mr. Pambagyo reported that there were 25 red light pairings who were finding difficulty in reaching a middle ground.
The main challenge that RCEP faces is mediating the unique dynamics that arise between different partners with overlapping FTA commitments and varying sensitivities to one another. While some ASEAN FTA partners have long-standing bilateral relations, others do not. This creates difficulties in reconciling different levels of tariff commitments within existing FTA while also ensuring that ambitions from other negotiations are not brought into RCEP.
Referring to the overlap between RCEP and CPTPP, Mr. Pambagyo stressed that stakeholders must focus on RCEP as its own separate agreement – it might be in the same zoo as CPTPP but they are ultimately different animals. This focus will be essential to overcoming further challenges such as reaching a collective ASEAN position, finding the correct balance in ‘trading-off’ on issues, maintaining momentum throughout upcoming national elections and addressing trust deficits at the negotiation table.
Nonetheless, Mr. Pambagyo remains positive and hopeful about RCEP’s prospects of being finalized by the end of 2019 as long as all parties remain realistic about what is both commercially meaningful and practically achievable in upcoming rounds of negotiation.
To learn more about Mr. Pambagyo’s view on the negotiations of RCEP, we provide a link to the Public Discussion Summary to be used for your perusal.