Difficult trade-offs necessary for RCEP to be worthwhile: PM Lee Hsien Loong

Association of Southeast Asian Nations (ASEAN) leaders link arms during the opening ceremony of the 30th Asean Summit in Manila, Philippines on April 29, 2017. PHOTO: REUTERS

MANILA - Asean is keen to conclude a region-wide trade agreement with its key partners, but the pact must have substance to be worthwhile, said Prime Minister Lee Hsien Loong on Saturday (April 29).

This means that countries involved in the Regional Comprehensive Economic Partnership (RCEP) must be willing to make difficult trade offs so that the agreement will be credible and of a high quality, he added.

Speaking to Singapore reporters after attending the Asean Summit in Manila, Mr Lee said: "We hope to have a good RCEP and not just an RCEP."

He also said he was not optimistic that negotiations, already two years past its original 2015 deadline, would be concluded this year.

"I'm not a betting person but I think that we need to work on it a little bit longer. We try our best and we set deadlines, and you try to work towards that, but I think that this will probably take a while more," he added.

During a meeting with fellow Asean leaders earlier, he had urged them to conclude negotiations on the agreement speedily, but not set the bar too low.

Asked to elaborate at an interview, Mr Lee said Asean already had separate free trade agreements with some of the non-Asean countries involved in the deal: China, India, Japan and Korea.

To add value, the RCEP cannot be the equivalent of these deals "superimposed on top of each other", he said.

"So there are difficult trade-offs, but unless we are prepared to make some of these difficult trade-offs, I think the RCEP risks becoming much ado about nothing and that will really be a big pity," he added, while acknowledging that different countries have different calculations and perspectives.

For instance, India has pushed for the liberalisation of the services sector, particularly for the easy movement of workers, as a condition for opening up its goods markets, but this a "very sensitive matter for many other countries".

But he also noted that the bar cannot be set as high as that of the Trans-Pacific Partnership trade pact, which the United States has withdrawn from.

The US, as the world's largest economy and a major player in the TPP, had made demands on matters such as the protection of intellectual property of pharmaceuticals or movies.

As a result of what the US could bring to the table, other countries were willing to make concessions, said Mr Lee.

For the RCEP to work, it must be "substantial, meaningful, and has balance benefits for all of the participants in the package", he added.

"In the end there will be some compromises and we may not get everything which we want. But I think we try to push hard for something with some ambition and later on (if) I must compromise, at that point I will make a tough decision. I don't think we are ready to concede yet," said Mr Lee.

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