RCEP: Unlocking barriers to regional economic integration
By Dr Kaewkamol Pitakdumrongki
RCEP is the key to ASEAN centrality
Signed by 10 ASEAN members together with Australia, China, Japan, New Zealand, and South Korea, RCEP is currently the world’s largest free trade agreement – accounting for 30 percent of both the world’s population and global GDP.
However, its public reception has not always been positive. Critics contend that the arrangement is shallow in terms of its tariff cuts, that it lacks rules governing the modern economy, and that its benefits to regional economic integration and transparency pale in comparison to other trade agreements.
Despite these criticisms, evidence reveals that RCEP yields actual value-added benefits for its members, as well as international trade governance. Economic analyses, for example, predict that the arrangement will add to global GDP by US$186 billion annually until 2030.What’s more, the agreement enables its signatories to leverage intra-bloc ties, weathering through the uncertainties caused by the US-China trade war. In fact, the benefits of RCEP are projected to be larger during a sustained US-China trade war than during a business-as-usual environment.
Despite common misunderstandings, RCEP is an ASEAN-led initiative; the notion of ASEAN Centrality has undergirded the agreement since its inception and is ingrained in RCEP negotiations. Even according to the agreement’s guiding principles and objectives, the talks “will recognise ASEAN Centrality in the emerging regional economic architecture.”
RCEP’s establishment shifts the regional economic centre of gravity southwards away from China, reflecting ASEAN’s leadership and influence in shaping regional trade architectures. The grouping showcases that it will implement the ASEAN Outlook on the Indo-Pacific, which strives to foster and maintain rules-based regional architectures, deepen economic cooperation, and augment ASEAN-led mechanisms.
There are real value-added benefits that RCEP yields for its parties and regional economic integration. Its gains are in both economic and non-economic realms. Therefore, despite its criticisms, RCEP should be more appreciated as another key vehicle contributing to international trade governance.