RCEP negotiators recount twists and turns in 8-year journey to world's biggest trade pact

(From left) Giselle Lee, who worked on the RCEP services and movement of natural persons chapters; Regina Tan, e-commerce chapter; Sulaimah Mahmood, chief negotiator; Janice Cai, goods chapter; Faridah Mohd Saad, investment chapter; and Tay Lide (on tablet), goods, services and investment chapters. ST PHOTO: JASON QUAH

SINGAPORE - Ms Sulaimah Mahmood recalls with bracing clarity the moment last year when India dropped the bombshell that it would pull out of the Regional Comprehensive Economic Partnership (RCEP).

Eight years' worth of hard-fought negotiations flashed past the eyes of Singapore's chief RCEP negotiator as Indian Prime Minister Narendra Modi said on Nov 4, 2019, that his "conscience" would not permit him to let India join the world's largest trade pact.

"I literally froze from shock and disappointment," said Ms Sulaimah, 63, a senior director at the Ministry of Trade and Industry.

Teams from all 16 participating countries had gathered in Bangkok and worked past midnight on the eve of India's bombshell announcement to iron out the final kinks.

They turned up at the RCEP Summit the next evening to announce that the agreement was done and dusted.

It was not to be.

Mr Modi said the RCEP did not address satisfactorily India's outstanding issues and concerns. New Delhi had faced intense domestic opposition to the deal, out of fears that an influx of cheap Chinese goods would decimate its infant industries.

But there had been no sign from India that it would take the drastic step of walking away, said Ms Sulaimah who, with five other negotiators from MTI, spoke to reporters on Wednesday (Nov 25).

One of them, Ms Giselle Lee, 27, said a key worry was that India's withdrawal would trigger a domino effect and cause other parties to pull out, as some had been very keen to have India on board.

"We had to quickly gather our wits about us... our next challenge was to keep all the other countries on course and to continue with the signing (of the RCEP) this year," she said.

Streamlining the rules

India's pullout was just one of the many twists and turns in the RCEP journey that was steered by the 10-member Asean, said Ms Sulaimah.

She was quick to clarify the narrative in some international media that the process was China-led.

Many have observed that China, being the world's largest trading nation, stands to gain the most from the pact.

Ms Sulaimah Mahmood said the reality is that agricultural products such as rice and sugar continue to be sensitive for some Asean members. ST PHOTO: JASON QUAH

Although the RCEP negotiations were officially launched only in 2012, Asean had begun to think about the emerging regional architecture as far back as 2006. This was after it completed all its plus one FTAs, which refer to its trade pacts with individual nations such as China , Japan and South Korea.

Said Ms Sulaimah: "We had different rules for each of these FTAs. (So) what we've done with the RCEP is to have one rule for each product that each country can use for the other 14 parties."

The grouping also came up with a set of guiding principles and objectives in 2012, which laid out members' motivations and ambitions for the trade pact.

Dealing with diversity and change

At a forum earlier this month, Prime Minister Lee Hsien Loong said the 11-member Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) - a partially overlapping arrangement that was concluded two years ago - went for a deep agreement that requires substantial commitments from all parties involved.

In comparison, he said the RCEP trade pact is a "different animal, for a different purpose" - not as deep, but still a significant step towards reducing trade barriers.

Ms Sulaimah said the reality is that agricultural products such as rice and sugar continue to be sensitive for some Asean members.

Many are keen to protect their farmers from a potential influx of cheap imports.

At the same time, countries that did not have FTAs with each other then, such as China, Japan and South Korea, were locked in bilateral talks which added to the complexity of negotiating the RCEP, she added.

Automotives were another sticking point, since there are many major automotive producers in the region, said Mr Tay Lide, 33, who negotiated the goods, services and investment chapters of the RCEP.

He also noted that most countries had difficulty retaining the same set of negotiators for eight long years.

"Elections happen, policies change - a lot of it is about dealing with the fluidity of the situation," said Mr Tay.

"Every time someone moves and we deal with a new personality, it is a new process of trying to gain trust."

The 46-strong Singapore team is a mix of old and new faces from across government agencies, including MTI, Intellectual Property Office of Singapore, Singapore Customs, Monetary Authority of Singapore, Attorney-General's Chambers, Infocomm Media Development Authority, Competition and Consumer Commission of Singapore, and many others.

Different levels of development

Given the growing importance of digital trade in Asia, many had hoped the RCEP would include stronger provisions that would lower barriers for e-commerce.

While Singapore, too, wanted a more ambitious e-commerce chapter, one must understand that the least developed economies had tried their level best, said Ms Sulaimah.

Some either did not have e-commerce regulations or wanted to preserve policy space.

"But we managed to reach a landing zone where we said: 'Okay, let's conclude this because if we continue for another two or three years, it will not get better.'"

She said the agreement can be improved later under a review mechanism.

Ms Regina Tan, 40, who negotiated the e-commerce chapter, said there are transitional arrangements in place for countries that need more time to build up their regulatory regimes to fulfil their obligations after a certain number of years.

"It's a matter of understanding that there are real constraints and trying to work through those constraints," she added.

"At some point, we'll all get there together."

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