Cambodia’s ASEAN economic minister said the official launch of the negotiations for the Regional Comprehensive Economic Partnership (RCEP) will lead to potentially forming the biggest single market in the region and is much bigger than the traditional markets of the US and the EU.

An economist and the minister both said Cambodia will enjoy great benefits from the trade agreement by expanding its exporting markets to other countries in the region.

The RCEP was officially launched on Tuesday during the 21st ASEAN Summit in Phnom Penh – of which the leaders of the ASEAN member countries, along with the leaders of Japan, India, China, Korea, Australia and New Zealand, issued a joint declaration to begin RCEP negotiations in order to pave the way to boosting trade and investment under the Free Trade Agreements (FTA).

Minister of Commerce Cham Prasidh said in a discussion with reporters yesterday that the launch of RCEP negotiations demonstrated the efforts of leaders to speed up the realisation of the partnership.

“This is a great effort to build a base which is bigger than the United State plus Europe,” said Cham Prasidh. “We see just the total population of China, India and ASEAN is more than half the world’s population and the economic power is also strong,” he added.  

“That’s why in the ASEAN framework, we are all trying to start negotiations on opening one more new market which we can export to duty and quota free,” he said. “Even though we’ve already opened one door, we are trying to seek opening a new door to ensure our exports in the long-run,” he said.

Hiroshi Suzuki, CEO and chief economist at the Business Research Institute for Cambodia (BRIC), said the RCEP will substitute the current FTAs between ASEAN and each of the six countries.

Suzuki described the current situation as being a “spaghetti bowl” because the number of bilateral FTAs have resulted in congestion.

“The RCEP will become much more convenient and smooth out FTAs among the 16 countries,” he said. “I would like to express appreciation of the decision to start the negotiations,” he added.

In Suzuki’s opinion, the RCEP will not allow as much free flow of trade as the Trans-Pacific Partnership between the US and other Asian nations, but still has its advantages.

“The RCEP would not be so free compared with TPP. However the effect of RCEP would be very big and positive to strengthen the ASEAN Economic Community (AEC) and the single market among 16 countries. Now Cambodia is becoming one of the production bases in ASEAN with the advantage of low labour costs and a good location on the Southern Economic Corridor among the other ASEAN countries. This trend will be further strengthened by RCEP,” he added.

Negotiations for RCEP will begin in early 2013 and are expected to be completed by the end of 2015 alongside the materialisation of the AEC.

According to statistics on the ASEAN website, the RCEP could potentially transform the region into an integrated market comprising more than three billion people with a combined GDP of about US$19.78 trillion.

Cham Prasidh said he will set up the taskforce and contact all member states to prepare the work.

“We believe the RCEP will materialise and so we’re beginning to promote it, based on the guiding principles we’ve all agreed on in terms of how to negotiate and talk to each other about this partnership.”

To contact the reporter on this story: May Kunmakara at [email protected]