The long-awaited Asia-Pacific Regional Comprehensive Economic Partnership (RCEP) is sealed on November 15. (Photo: VNA)
Phnom Penh (VNA) - The November 15 signing of the long-awaitedAsia-Pacific Regional Comprehensive Economic Partnership (RCEP) agreement bringsrenewed hopes for comprehensive change in the flow of regional trade andinvestment and the promotion of intra-bloc supply chains capable of bolsteringtrust among members of the region’s business sector.
According to Khmer Times, the terms of the agreement have provedelusive since negotiations between ASEAN’s member states and six free tradepartners, (Australia, China, India, Japan, the Republic of Korea and NewZealand), began in 2012.
The final agreement includes 15 signatory countries, India having dropped outof the negotiations last year, citing that it was no longer in line withIndia’s national interest or in adherence with the principles agreed to by theparticipating countries at the inception of the negotiations.
The 15 signatory countries to the RCEP remain open to India reconsideringits decision.
“All of the participating countries still welcome the prospectof India joining the RCEP,” said Seang Thay, secretary of state of the Ministryof Commerce. He pointed out that India had been a participant in thenegotiations since they were convened in Phnom Penh in 2012. Thay also notedthat India is a comprehensive partner in the region and will no doubt continueto contribute to the region’s economic expansion and participate in theevolution of a more comprehensive regional production chain.
Thay said studies by the Economic Research Institute for Asean and EastAsia (ERIA) show that the successful conclusion of the negotiations couldcontribute to additional annual sector growth across the board to the Cambodianeconomy. ERIA projections anticipate exports growing by 7.3 percent annually,foreign direct investment by 23.4 percent and gross domestic product (GDP) byan additional 2 percent as a result of the signing and the agreement’s finalratification.
Jayant Menon, a visiting senior fellow with ISEAS-Yusof Ishak Institute, saidthe signing of the agreement is a positive development coming at a time of arising backlash against globalisation and growing protectionist pressurestaking hold around the globe. Against this tide, the RCEP has potentiallybirthed the world’s largest free trade agreement (FTA), one that accounts foralmost a third of the world’s population and economic output.
“The RCEP will focus on harmonising rules and regulations. Regulatory convergence will support the development of the region’s supplychains and, in doing so, reduce the cost of doing business. But RCEP will onlymake a difference if the individual nation signatories ratify the agreementquickly and implement it faithfully,” Dr Menon said.
Chheng Kimlong, second vice-president of the Cambodian thinktank Asian Vision Institute (AVI), said that joining the RCEP provides Cambodiawith many new opportunities including the establishment of untapped exportmarkets, the enhanced attraction of foreign investment and a greater potentialfor upgrading the country's economic foundation and economic growth base.
He noted that once the RCEP deal is in effect that it couldpotentially become the world’s largest trading alliance, representing 30percent of global trade and roughly 30 percent of global GDP. He added Cambodiawill be able to reconfigure export markets and product diversification,upgrading the Kingdom’s product and service competitiveness for domestic andexport markets.
“Opening up the Cambodian economy to attract inbound investmentand technology has been a cornerstone of our economic development. Themega deal represented by the RCEP can be a dramatic driver of growth, despitethere being some challenges that remain to be addressed along the way,” Kimlongsaid.
The RCEP agreement upon ratification will be the largest trade deal in theworld creating a market of 2.2 billion people, (approximately 30 percent of theworld’s population), with a GDP of close to 26.2 trillion USD (30 percent ofthe world’s GDP) representing about 28 percent of world trade, based on 2019data./.
