South-east Asia's economic ministers have agreed on "key elements" they hope will accelerate talks on a mega trade deal that will cover a third of the world economy.
Philippine Trade Secretary Ramon Lopez told reporters the ministers agreed at the end of their meetings here yesterday on baselines for further talks on the Regional Comprehensive Economic Partnership (RCEP), including the desired level of liberalisation needed.
The ministers agreed that nations that sign up for this mammoth free trade agreement should commit to remove barriers on at least 92 per cent of their product lines over five to 10 years. All 10 Asean member countries have already signed up to this, and anything less will be unacceptable to the bloc, he said.
The group's six trading partners, meanwhile, agreed to "recalibrate" their offers and return for a new round of discussions next month.
"Hopefully, their submissions will be within the parameters we've set," said Mr Lopez. He said while some of the Asean partners were willing to remove trade barriers on all of their products, at least one nation, which he declined to name, was still insisting on liberalising just 70 per cent of its products.
RCEP was conceived in 2012 to harmonise the agreements of the 10 members of Asean with six of their trading partners: China, Japan, India, South Korea, Australia and New Zealand. If approved, the trade deal will cover nearly 3.5 billion people, making it the largest trade bloc in terms of population. It will also encompass a third of the world's gross domestic product and total trade.
The United States, under former president Barack Obama, had pushed for the Trans-Pacific Partnership (TPP), a rival trade deal that would have encompassed 12 countries that together account for 40 per cent of global gross domestic product and 20 per cent of world trade. But the election of Mr Donald Trump last year made the TPP a non-starter. He had campaigned against the deal, warning that it would cost the US jobs, and officially withdrew the US from the pact.
While the remaining 11 TPP signatories will have to decide whether to move on without the US or abandon the agreement completely, attention is now focused on RCEP.
Mr Lopez said he did not expect RCEP to be approved this year. But he is confident the 16 nations involved can agree on market access, a liberalisation schedule and rules that Asean leaders can sign up to when they meet for a summit here in November. "The takeaway now is that there is convergence among Asean, plus a few dialogue partners. When you see most have converged, there's pressure on the holdouts. Hopefully, this will accelerate the negotiations," he said.
A conclusive agreement, he said, will boil down to "peer pressure".