Logo of Phnom Penh Post newspaper Phnom Penh Post - Providing intellectual support for fully unleashing RCEP’s dividends



Providing intellectual support for fully unleashing RCEP’s dividends

Content image - Phnom Penh Post
Cambodian economy and finance minister Aun Pornmoniroth (left) attends the virtual signing of the Regional Comprehensive Economic Partnership Agreement (RCEP) on November 15, 2020. FINANCE MINISTRY

Providing intellectual support for fully unleashing RCEP’s dividends

Currently, in the face of the global economic crisis, high-level implementation of the Regional Comprehensive Economic Partnership Agreement (RCEP) and the full release of the RCEP dividend will not only have a significant impact on the regional economic integration and regional economic growth in East Asia but also make important contributions to the world economic recovery and global economic rebalancing.

Our intention to jointly initiate the RCEP Think Tank Network is to work with think tanks in the region to create an open and shared academic cooperation network and provide intellectual support for advancing the RCEP process.

Firmly advancing the RCEP process

RCEP is the most dynamic free trade area with the greatest growth potential in the world. From 2011 to 2021, the average annual GDP growth of RCEP member countries was 4.6 per cent, which was 0.9 percentage points and 4.4 percentage points higher than that of North America and Europe/Central Asia, respectively.

RCEP member countries contributed 48 per cent of the global economic growth with a share of 30 per cent of the global GDP. It is estimated that by 2030, the proportion of RCEP member countries in the global economy will increase from the current 30 per cent to about 50 per cent, becoming the main engine of global economic growth in the next 5-10 years.

RCEP will reshape the regional economic pattern, consolidate and optimize the regional industrial chain, supply chain and value chain, and bring along new business opportunities and create new sources of economic growth. A few days ago, at the China-ASEAN Expo, the signed investment cooperative projects exceeded 400 billion yuan ($55.8 billion), an increase of 37 per cent over those at the previous expo.

There is a big gap in the development levels of RCEP members. Based on this reality, RCEP has adopted some differentiated policies to pragmatically promote the process of economic and trade cooperation in the region, which will continuously release the region’s huge potential of economic growth.

RCEP’s lower tariffs, unified market requirements and rules of accumulative origin are conducive to reducing production costs, increasing investment opportunities, and forming a unique development advantage in the region.

RCEP has adopted inclusive and flexible measures such as transition period and exception principle according to the different situations of member countries, which will practically and effectively reduce barriers to trade and investment in the region, making important contributions to the progress of economic and trade cooperation in the Asia-Pacific.

The Indo-Pacific Economic Framework launched by the US attempts to lead the reconstruction of the Asia-Pacific regional economic and trade system through a series of standards. Facts will prove that it is difficult for IPEF to replace RCEP or weaken the role of RCEP. On the contrary, it will lead to greater instability in the industrial chain and supply chain in the region.

The establishment of the RCEP Think Tank Alliance aims to give full play to the synergy of think tanks in the RCEP region, through various forms of academic exchanges and cooperation, contributing to resistance of outside interference in deepening RCEP regional cooperation, and to promotion of broader and deeper consensus in all parties firmly advancing the RCEP process.

Solving practical problems in the process of RCEP construction

It is necessary on the basis of existing commitments to shorten the “zero tariff” transition period for important raw materials and key components as much as possible, and to promote RCEP member countries’ transition from “country-specific tariff reductions” to “unified tariff reductions” to reduce the cost of businesses’ utilizing the RCEP Agreement, et cetera.

It is necessary to complete the review of relevant clauses in rules of origin in the RCEP Agreement as soon as possible, and to promote upgrading of the rules of origin from “partial accumulation” to “complete accumulation” in a timely manner, so that enterprises can develop their industrial chain and supply chain layout more flexibly.

It is necessary to promote the transition from the positive list to the negative list of cross-border trade in services and to realize integrated management of the negative list of trade in services and investment so as to promote the extension of processing and manufacturing in the region to high value-added links.

It is necessary to RCEP members to further promote relaxation of market access in areas such as goods, services, and investment.

It is necessary for all parties to promote gradual unification of customs procedures, inspection and quarantine, technical standards, and regulatory rules so as to promote free flow of economic factors within the region and to build a high-level RCEP unified market.

It is needed to adapt to the trend of digital transformation and green transformation, and to explore inclusive rules for development of digital economy and green economy.

It is required to adhere to open regionalism, facilitate India’s return to RCEP and attract other countries and regions to join.

Focusing on serving policy decision-making, serving RCEP members’ efforts to make full use of the RCEP market opening commitments and rules, and to achieve their economic development and industrial upgrading by deeply integrating into the process of regional cooperation.

Providing intellectual support based on enterprises’ real need for enterprises’ efforts to develop diversified layout of their investment and operations in the RCEP region, and intellectual support for improving pertinence and effectiveness of trade and investment promotion policies.

Focusing on the medium and long term to study the feasibility of starting negotiations on higher standard market opening rules in addition to carrying out the RCEP progress assessment, thus contributing to RCEP’s expansion and upgrading.

Multi-layer exchanges and cooperation among RCEP members

At present, among the 15 member countries of RCEP, the per capita GDP of eight countries is lower than the world average, and the per capita GDP of 6 countries is lower than that of developing countries. To advance the RCEP process, we still face the issue of how to help developing countries and LDCs better adapt to a more open environment in the regional market.

It is necessary to work together to build the RCEP public service platform and capacity-building mechanism in order to improve the ability of government officials and entrepreneurs’ ability to use the RCEP rules to compete in the regional market.

It is necessary to work together to improve the business environment of all parties to better attract the RECP region’s high-quality capital and all kind of talents to help their economic development.

Under the influence of the US Fed’s policy of raising interest rates, RCEP members are generally under pressure from capital outflows and depreciation of their currencies. This not only aggravates the imported inflationary pressure in the RCEP region, but also increases the risk of the regional financial market.

It is necessary to strengthen macroeconomic policy communication among RCEP members, and to establish and continuously improve macroeconomic policy coordination mechanism in the RCEP region as soon as possible.

It is necessary to strengthen the coordination of fiscal, monetary, exchange rate, trade and structural reform policies to promote balanced economic recovery and growth in the RCEP region.

It is necessary to avoid introducing additional trade and investment restrictions which may disrupt the stability of industrial and supply chains in the region, and to maximize as much as possible the positive spillover effects of macroeconomic policies.

Promoting communication and mutual policy learning among RCEP members

• It is important to build a mutual learning platform, promote policy dialogue among RCEP members around macroeconomic stability, and serve and promote policy communication and coordination within the RCEP region.

• Build a communication platform between the government and businesses, serve RCEP member governments’ efforts to better attract development factors, and assist enterprises to carry out investment layout more effectively.

• Build an academic exchange platform for promoting think tanks in the RCEP region to complement each other’s advantages in order to effectively improve their international influence and intellectual supporting capabilities through exchanges and mutual learning.

As for how to bring the role of the RCEP Think Tank Network into full play and how to expand its influence, written documents have been sent to you for your comments and suggestion. Here, I would like to put forward several suggestions.

First, we can set up a RCEP Regional Cooperation Summit Forum to build a platform for exchanges and cooperation.

Second, we can establish a RCEP capacity-building center to enhance the ability to implement and utilize RCEP-related policies. With the support of Oceanic Development Foundation, China Institute for Reform and Development will organize a “Blue Economy Development Capability Training Seminar under the Framework of RCEP” at the end of November, and we would like to invite participation and support from all the members of the RCEP Think Tank Network.

Third, we can join hands to build a website of the RCEP Think Tank Network as a platform for sharing information, resource and research results.

Fourth, we can implement cooperation projects such as mutual academic visits, exchange of visiting scholars, talent training, and establishment of youth camps. Here, I would like to welcome scholars from members of the RCEP Think Tank Network to come to China Institute for Reform and Development for research.

Fifth, I would like to suggest using Hainan Free Trade Port as a platform base for cooperation and exchange of the RCEP Think Tank Network. Hainan Free Trade Port is located right in the center of the RCEP region, and will gradually become an important hub between China and other RCEP members. It will also become a meeting point for different national markets of the RCEP region. Based on this, I would like propose to incorporate activities of ASEAN-HNFTP Think Tank Network into those of the RCEP Think Tank Network. china daily/asia news network

Chi Fulin is president of the China Institute for Reform and Development. The views don’t necessarily reflect those of China Daily.

MOST VIEWED

  • South Korea’s first lady brings hope to ill boy

    South Korea’s first lady Kim Keon-hee – wife of current president of the Republic of Korea, Yoon Suk Yeol – met with a 14-year-boy with congenital heart disease during her trip to the Kingdom for the ASEAN Summit. After their meeting it was announced that the

  • Hun Sen gets Covid, shuns G20, APEC summits

    Prime Minister Hun Sen said he has tested positive for Covid-19 in Indonesia, where he is slated to attend the G20 summit in his capacity of the ASEAN chair. In a social media post addressing the Cambodian public, he said: “Before leaving Cambodia, I always

  • Moody’s sets outlook rating to ‘negative’ for Cambodia

    US global rating agency Moody’s Investors Service Inc on November 15 announced that it downgraded Cambodia’s outlook from “stable” to “negative” and maintained its B2 local and foreign currency issuer ratings. “The negative outlook reflects a deteriorating external position as illustrated by the severe

  • Hun Sen’s Covid infection caused by ‘weakened antibody’ after summit

    Prime Minister Hun Sen said exhaustion from heavy workload before and during the recent ASEAN Summit may have led to him contracting Covid-19 due to his weakened immune system, while rejecting speculations that the infection was caused by leaders of some countries who did not

  • Korean first lady paves way for ill boy’s surgery

    A 14-year-old boy with congenital heart disease who was lucky enough to meet with South Korean first lady Kim Keon-hee may get the chance of a lifetime and receive surgery and treatment at Asan Medical Center in Seoul, South Korea. After seeing his plight, many

  • Kingdom’s rice crowned world’s No1

    Cambodia’s Phka Rumduol jasmine variety has been crowned the World’s Best Rice for the fifth time at the TRT (The Rice Trader) World Rice Conference in Phuket, Thailand on November 17, according to leaders of the Kingdom’s apex rice industry body. Phka Rumduol