From February 5 to 9, the 21st round of the Regional Comprehensive Economic Partnership Agreement (RCEP) was held in Yogyakarta, Indonesia. The participating countries have made great progress in the trade of goods, services, investment and intellectual property rights. They also agreed to hold a new round of negotiation in Singapore on March 3. All these have shown that the RCEP has entered the final stage of negotiation.
However, it is undeniable that the RCEP also faces many difficulties, the most important of which can be described as follows.
First, all countries involved in the RCEP negotiation agree to make greater tax cuts on trade in goods and hope to maintain a 90% rate of liberalization in the entire customs and tariffs. However, India has always been skeptical about the negotiation of a multilateral free trade agreement and has been reluctant to implement a fast opening up. It wants to maintain the rate of liberalization at 70% only, which is obviously different from that of other countries. If India remains to be stubborn, it will be difficult for the RCEP to achieve a comprehensive tax reduction.
Secondly, according to the plan, the member countries of the RCEP should also include the Asia-Pacific economic powers such as China, South Korea, Japan, India, Australia and New Zealand in addition to the 10 ASEAN countries. In terms of expanding trade in services and improving trade facilitation, Australia and New Zealand hope that the RCEP can demonstrate a higher level of liberalization and provide more opportunities for services export, but the high standard set by the two countries can hardly be accepted by other ASEAN countries.
Thirdly, some other countries, including Japan and South Korea think that the United States may return to the TPP. They hope that the progress of the RCEP can make the United States regret quitting the TPP. At present, the CPTPP led by Japan suspended the implementation of the original 20 articles, which involves intellectual property, telecommunications dispute, investment and so on. If the United States return to the TPP, Japan and South Korea will be so pleased due to the huge market in the US. The two countries expressed that more TPP provisions should be transferred to the RCEP. While other countries are keen on reaching an agreement as soon as possible, Japan prefers to spend a longer time on formulating high-quality rules.
The three points above indicate that instead of treating the common interest of all countries as a top priority, all the participating countries only focus on their own interest. If the RCEP can be reached, it will form the largest trading agreement with a population of nearly 3.5 billion and a gross domestic product of about 21 trillion dollars, accounting for about 30% of the total world trade. This will increase employment for all countries, promote sustainable growth, inclusive development, innovation and improve the living standards in all countries.
However, some countries are still skeptical about the negotiation. At present, the conservatism and trade protectionism are on the rise and the multilateral trade agreement has been abandoned by the United States irresponsibly, thus, we need to reach a consensus on the RCEP as soon as possible. Besides, we have to abolish the conservatism, the self-centered principle of America First, and uphold the global trade rules and liberalization.
Some people claim that the RCEP can not keep up with the changing situation if the CPTPP can be reached, but I do not agree with this viewpoint. All the participating countries should overcome the three problems described above. As long as all parties work together, RCEP will surely reach the best agreement by the end of this year.