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RCEP fails to conclude by year-end as hoped; timeline extended to 2019
THE much-awaited finalisation of the Asean-led Regional Comprehensive Economic Partnership (RCEP) will not materialise by the end of 2018 as initially hoped, confirmed Singapore Prime Minister Lee Hsien Loong in his opening remarks at the 2nd RCEP Summit on Wednesday.
The participating countries will work towards the completion of RCEP talks by next year instead.
Negotiations have taken longer than usual due to the unique challenges confronting a mega free trade deal such as the RCEP, explained Mr Lee.
For a number of countries, this would be the first time working on a free trade agreement with each other, he added.
It was understood that leaders were unable to iron out key terms of the agreement in time, despite best efforts to push for a substantial conclusion to what would be the world’s largest free trade deal by the year-end.
The finalisation of the RCEP has been a key priority for Singapore, as chair of the 10-member Asean this year.
The RCEP is made up of Asean and six key partners with which the bloc has existing free trade agreements - China, South Korea, Japan, India, Australia and New Zealand. They account for almost half of the world’s population, contributing about 30 per cent of global gross domestic product, and over a quarter of world exports.
RCEP talks have dragged on for five years as member countries have been unable to agree on key terms such as the movement of labour, treatment of services and market access.
The trade deal has often been referred to as an alternative to the previously US-led Trans-Pacific Partnership (TPP), partly began to counter the US’ economic might and influence in the region.
A wide range of issues are being covered in the RCEP negotiation including trade in goods, trade in services, investment, economic and technical cooperation, intellectual property, competition, dispute settlement, e-commerce, small and medium-sized enterprises (SMEs) and more.
Since Tuesday, trade officials from the various participating countries have spoken up about the diminishing odds for the RCEP to be concluded by this year.
In a speech in Singapore on Tuesday, Chinese Premier Li Keqiang said that he hoped that the RCEP talks would be completed next year.
“With the headwind of trade protectionism, free trade is facing some difficulties,” Mr Li said.
Australian and Indian trade ministers had also told reporters on the sidelines that the RCEP talks would take longer than expected as more time is needed to reach an agreement that would benefit all countries.