RCEP members must strengthen, expand and improve trade pact to stay relevant: PM Wong
The global environment has changed considerably since 2022, when the mega trade agreement entered into force, he notes
[KUALA LUMPUR] The Regional Comprehensive Economic Partnership (RCEP) can realise its full potential only if member countries fully implement, expand and continually improve the trade pact, said Prime Minister Lawrence Wong on Monday (Oct 27).
This is especially important as the global environment has changed considerably since the pact entered into force in 2022, placing pressure on the multilateral rules-based trading system, he added.
“The RCEP agreement keeps alive the promise that countries can achieve more together than alone,” said PM Wong at the 5th RCEP Summit, held on the second day of the 47th Asean Summit in Kuala Lumpur.
The RCEP has not held an official leaders’ meeting since November 2020, when a trade deal aimed at lowering tariffs, boosting investment and allowing freer movement of goods within the region was signed.
The partnership – which brings together Asean member states as well as China, Japan, South Korea, Australia and New Zealand – forms the world’s largest trading bloc, covering nearly a third of the global population and about 30 per cent of gross domestic product worldwide.
While Timor-Leste is now a member of Asean after its accession on Sunday, it is not a part of the RCEP and will need to undertake the necessary processes to join the bloc.
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Some analysts view the RCEP as a buffer against the tariffs imposed by the US, a Reuters report indicated, though its provisions are considered weaker than some other regional trade deals due to competing interests among its members.
For the pact to fulfil its potential, PM Wong said member countries must ensure its full and effective implementation.
He noted that mechanisms exist to address issues such as tariff differentials – where the same good faces varying tariff rates depending on its origin – which some businesses view as a barrier to using the agreement.
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Resolving these and other outstanding matters quickly, he added, will help to maximise the RCEP’s benefits and allow all businesses – including small and medium enterprises – to fully tap its possibilities.
He also said that strengthening and expanding the agreement would bolster supply chains, open new markets, and better equip members to address emerging priorities such as the green and digital economies.
Reaffirming Singapore’s commitment to work with all participating countries to advance their shared agenda, PM Wong said: “In this uncertain environment, it is more important than ever for our economies to come together, to show that free trade can deliver for our people and bring shared prosperity to our region.”
Asean+3
At the 28th Asean Plus Three (APT) Summit, a separate forum, PM Wong outlined three priorities to strengthen regional resilience and growth.
The APT is a cooperative framework comprising Asean member states, China, Japan and South Korea that focuses on political security as well as trade and investment, among other areas.
PM Wong called for collective efforts to withstand economic shocks amid rising protectionism, stressing support for an open, rules-based multilateral trading system anchored by the World Trade Organization.
He also urged the strengthening of regional safety nets such as the Chiang Mai Initiative Multilateralism – a multilateral currency swap arrangement among APT members to address the short-term liquidity difficulties in the region – and the APT Emergency Rice Reserve.
To sustain growth, the region must accelerate economic integration by fully implementing and updating existing trade pacts, including the RCEP, he said.
Lastly, he highlighted opportunities in emerging areas such as the digital economy, green finance and clean energy, encouraging APT partners to collaborate on initiatives like the Asean Digital Economy Framework Agreement and the Asean Power Grid.
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