The Association of Southeast Asian Nations (Asean) and its six trading partners are targeting to sign by 2015 the Regional Comprehensive Economic Partnership (RCEP), a free trade agreement that is expected to further open up new and bigger markets for local businesses.
Trade Secretary Gregory L. Domingo disclosed that this was the “soft timetable” set by the 10 member states of the Asean, which include the Philippines, and their main trading partners Japan, China, Korea, Australia, New Zealand and India. The signing of the RCEP would still depend on the discussions, negotiations and the prior completion of certain agreements, he added.
Domingo stressed that the RCEP was crucial, particularly for the Philippines, because two of the country’s biggest trading partners, namely China and Japan, were included in the agreement.
“[The RCEP is beneficial] to the extent that we can get better two-way flows in both trade in goods and trade in services and to the extent that we can encourage better investment regime. If more investments come from these partners, that will be good for us. The RCEP just kind of integrates the Asean and its +1 partners, into one economic regime,” Domingo explained.
The RCEP is a free trade agreement (FTA) between the 10 member countries of the Asean and their six FTA partners. This group of nations reportedly accounted for 40 percent of the world’s trade and has a combined GDP of about $17 trillion, according to an Aug. 22 statement posted on the Asean Briefing website.
The statement explained that the goal of the RCEP was to “create a comprehensive trade agreement that will facilitate economic integration between all the countries involved. The main negotiating issues involved are trade in goods and services, investment, economic and technical cooperation and dispute settlement.
“Potential benefits of the RCEP include a simplified FTA with standardized rules of origin regulations. It also seeks to regulate common incentives, which will thus allow businesses to make easier use of tax incentives available throughout the different countries without having to check back with each individual country regarding specific regulations,” it further read.
This also meant that the RCEP was envisioned to provide benefits that go beyond the existing +1 agreements of the Asean with its six trading partners.
“It was clear among everyone that the RCEP has to be something more than what we see in the current +1 agreements, otherwise, it doesn’t make sense to create a bigger agreement if we can’t get more than what the existing agreements are providing. What we have to watch out for are the incremental things we can get and have to give,” Domingo earlier said.