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RCEP talks could be nearing finish line; integrated Asean a more attractive economic partner: PM Lee

Singapore Prime Minister Lee Hsien Loong (9th from L) poses with the ASEAN economic and trade ministers at the opening of 50th ASEAN Economic Ministers (AEM) Meeting and Related Meetings in Singapore on August 29, 2018

AN open, integrated Asean makes for a more attractive and valuable economic partner, with the multilateral trading system under pressure, said Prime Minister Lee Hsien Loong on Wednesday.

Negotiations for the Regional Comprehensive Economic Partnership (RCEP), which began in 2013, “are at a critical stage” and the possibility of “substantively concluding” talks is finally in sight, he added.

And it is important, amid global tensions, for the South-east Asian bloc to press on with economic integration and its road map to 2025, he told a high-level gathering of regional leaders at the Shangri-La Hotel.

The proposed RCEP mega-deal has been touted as potentially forming the world's largest trading bloc, and involves all 10 Asean member states, as well as the association's six free trade agreement partners - Australia, China, India, Japan, South Korea and New Zealand.

“All of us are concerned about the growing geopolitical uncertainties,” Mr Lee told delegates at the opening of the 50th Asean Economic Ministers’ Meeting and Related Meetings, which will span four days. “The trade tensions between the US and our other dialogue partners, including China, the EU and Canada, have escalated.

“The rules-based multilateral trading system, which has underpinned Asean’s growth and prosperity, is under pressure. At the same time, each Asean member state is subjected to different pulls and pressures from the bigger powers.

“In these circumstances, all the more members must stay united and strive to maintain our cohesion and effectiveness.”

Mr Lee noted that, “given the diversity of RCEP’s members, we all have to make trade-offs and compromises” with the deal.

“But we should weigh these against the significant strategic and economic value of the RCEP,” he said.

“The RCEP will be an important signal to the world that Asean members, and our partners, place high value on free trade, regional integration and international co-operation.”

He urged the countries involved in the deal “to take a long-term view, to keep up the momentum, to engage constructively and with maximum flexibility” to deliver an agreement on the RCEP this year.

Calling the region's economic potential “clear”, Mr Lee added a note of caution: “But for this potential to be fully realised, we must continue to strengthen regional economic co-operation and integration.”

Meanwhile, Minister for Trade and Industry Chan Chun Sing said in opening remarks that trade openness can no longer be taken for granted, with Singapore's chairmanship of the bloc coming at a critical juncture.

“Despite the rising nationalist tendencies and anti-trade sentiments elsewhere in the world, Asean has stayed the course in our trajectory of regional economic integration,” he said.

“Businesses and consumers in the region have benefited from the realisation of the Asean Economic Community (AEC) in 2015. Intra-regional trade in goods are now largely tariff-free; non-tariff barriers have also been progressively reduced, services regulations made less stringent and more transparent, and pro-business investment rules implemented.”

But he added: “Our work did not end in 2015.” The blueprint for 2025 includes new moves to “future-proof” the AEC, he said, “in light of the rapid pace of technological change and digital disruption”.

Mr Chan added: “We should identify areas where our individual economies can complement one another to compete beyond Asean, take positive steps to facilitate trade, investment, and people-to-people links, so that collectively, we build a more integrated Asean. At the same time, we must uphold the multilateral and rules-based trading system.”

He added: “We cannot afford to let recent policy U-turns elsewhere detract us from defending the very foundation that underpins the AEC and has benefited the region.”

Events on Wednesday’s agenda include meetings of the Asean Free Trade Area Council and the Asean Investment Area Council, as well as a preparatory RCEP trade negotiating committee meeting.

The sixth RCEP ministerial meeting will take place on Thursday afternoon and all of Friday.

Mr Chan remarked that the week's meetings will see “additional commitments” to strengthening the AEC and partnerships, which “will serve as a bulwark against unilateralism and protectionism”.