Leaders vow to create world's largest free trade area in 2019

Task to conclude RCEP talks gains urgency amid current headwinds in global economy

Leaders of Asean's 10 members and six key trading partners vowed to seal a pact to create the world's largest free trade area next year - the Regional Comprehensive Economic Partnership (RCEP).

"The task to conclude the RCEP negotiations is becoming more urgent and significant given the current headwinds faced by the global economy," they said in a statement after meeting at the RCEP Summit.

"We undertook the collective commitment to deliver on the expeditious conclusion of the RCEP... to foster an open, inclusive and rules-based trading system, and demonstrate to the world that it is possible to make trade work for all."

Prime Minister Lee Hsien Loong, who hosted the summit, said he was heartened by the strong political will demonstrated and substantial progress made in negotiations.

Five more chapters of the pact were concluded this year, bringing the total to seven. And "significant breakthroughs" were made in negotiating parts on trading rules.

Discussions on market access had also advanced substantially, bringing the deal closer to finalisation next year. "We are now at the final stage of negotiations," he said.

"With the strong momentum generated this year, I am pleased to note that the RCEP negotiations are poised for conclusion in 2019."

Leaders pause for a photo at the Regional Comprehensive Economic Partnership (RCEP) Summit here yesterday. With Prime Minister Lee Hsien Loong are (from left) Vietnamese Prime Minister Nguyen Xuan Phuc, Myanmar State Counsellor Aung San Suu Kyi, Laot
Leaders pause for a photo at the Regional Comprehensive Economic Partnership (RCEP) Summit here yesterday. With Prime Minister Lee Hsien Loong are (from left) Vietnamese Prime Minister Nguyen Xuan Phuc, Myanmar State Counsellor Aung San Suu Kyi, Laotian Prime Minister Thongloun Sisoulith, Cambodian Prime Minister Hun Sen, New Zealand Prime Minister Jacinda Ardern, Indian Prime Minister Narendra Modi, Chinese Premier Li Keqiang, Thai Prime Minister Prayut Chan-o-cha, Australian Prime Minister Scott Morrison, Japanese Prime Minister Shinzo Abe, South Korean Trade Minister Kim Hyun-chong, Brunei Second Minister of Foreign Affairs and Trade Erywan Yusof, Indonesian President Joko Widodo, Malaysian Foreign Minister Saifuddin Abdullah, and Philippine Foreign Secretary Teodoro Locsin Jr. The RCEP accounts for 45 per cent of the world population, 40 per cent of global trade and a third of the world's economy. ST PHOTO: GAVIN FOO

In his remarks to fellow leaders, PM Lee noted that negotiations have taken "much longer than usual" due to the unique challenges of negotiating a mega free trade agreement (FTA).

"Complexities are expected as we are a group of diverse economies. For a number of us, this will be our first FTA with each other. But when concluded, the benefits will be equally substantial," he said.

"A substantial outcome for the RCEP will reassure businesses that our region remains committed to building a pro-business and investor-friendly climate," he added.

The RCEP accounts for 45 per cent of the world population, 40 per cent of global trade and a third of the world's economy. Negotiations began in 2013, with an initial target of wrapping them up by 2015, but this has been postponed several times, including this year.

PM Lee noted that talks were into their sixth year now, and urged fellow leaders to press on, saying: "Further prolonging negotiations puts the RCEP at risk of losing credibility and support from our stakeholders, and will mean missing a major opportunity to bring tangible benefits to our businesses and citizens."

 
 
 
 

Australian Prime Minister Scott Morrison urged members to bear in mind that the sum total of the agreement is bigger than any single item, and PM Lee said he was encouraged by the commitment all had shown to conclude a high-quality, mutually beneficial RCEP next year. He also thanked Indonesia for its leadership as RCEP country coordinator.

Speaking to the media after the summit, Trade and Industry Minister Chan Chun Sing said all the leaders present expressed "a strong determination" to conclude talks next year.

While some of the countries involved, including Indonesia and India, are holding elections next year, Mr Chan said he is "cautiously optimistic" this will not impede the progress of negotiations.

"The benefits of RCEP are for the long haul and many countries, if not all, understand this," he said.

"At the beginning of 2018, when we started our chairmanship... not many of us would have dared to imagine the kind of results we have achieved at the end of 2018," he added, referring to Singapore's chairmanship of Asean this year.

"This would not have been possible without the cooperation and support from all the ministers and countries involved," he added.

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A version of this article appeared in the print edition of The Straits Times on November 15, 2018, with the headline 'Leaders vow to create world's largest free trade area in 2019'. Print Edition | Subscribe