RCEP signing hoped to boost Cambodia’s economic upturn
Phnom Penh (VNA) - The November 15 signing of the long-awaited
Asia-Pacific Regional Comprehensive Economic Partnership (RCEP) agreement brings
renewed hopes for comprehensive change in the flow of regional trade and
investment and the promotion of intra-bloc supply chains capable of bolstering
trust among members of the region’s business sector.
According to Khmer Times, the terms of the agreement have proved
elusive since negotiations between ASEAN’s member states and six free trade
partners, (Australia, China, India, Japan, the Republic of Korea and New
Zealand), began in 2012.
The final agreement includes 15 signatory countries, India having dropped out
of the negotiations last year, citing that it was no longer in line with
India’s national interest or in adherence with the principles agreed to by the
participating countries at the inception of the negotiations.
The 15 signatory countries to the RCEP remain open to India reconsidering
its decision.
“All of the participating countries still welcome the prospect
of India joining the RCEP,” said Seang Thay, secretary of state of the Ministry
of Commerce. He pointed out that India had been a participant in the
negotiations since they were convened in Phnom Penh in 2012. Thay also noted
that India is a comprehensive partner in the region and will no doubt continue
to contribute to the region’s economic expansion and participate in the
evolution of a more comprehensive regional production chain.
Thay said studies by the Economic Research Institute for Asean and East
Asia (ERIA) show that the successful conclusion of the negotiations could
contribute to additional annual sector growth across the board to the Cambodian
economy. ERIA projections anticipate exports growing by 7.3 percent annually,
foreign direct investment by 23.4 percent and gross domestic product (GDP) by
an additional 2 percent as a result of the signing and the agreement’s final
ratification.
Jayant Menon, a visiting senior fellow with ISEAS-Yusof Ishak Institute, said
the signing of the agreement is a positive development coming at a time of a
rising backlash against globalisation and growing protectionist pressures
taking hold around the globe. Against this tide, the RCEP has potentially
birthed the world’s largest free trade agreement (FTA), one that accounts for
almost 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 supply
chains and, in doing so, reduce the cost of doing business. But RCEP will only
make a difference if the individual nation signatories ratify the agreement
quickly and implement it faithfully,” Dr Menon said.
Chheng Kimlong, second vice-president of the Cambodian think
tank Asian Vision Institute (AVI), said that joining the RCEP provides Cambodia
with many new opportunities including the establishment of untapped export
markets, the enhanced attraction of foreign investment and a greater potential
for upgrading the country's economic foundation and economic growth base.
He noted that once the RCEP deal is in effect that it could
potentially become the world’s largest trading alliance, representing 30
percent of global trade and roughly 30 percent of global GDP. He added Cambodia
will be able to reconfigure export markets and product diversification,
upgrading the Kingdom’s product and service competitiveness for domestic and
export markets.
“Opening up the Cambodian economy to attract inbound investment
and technology has been a cornerstone of our economic development. The
mega deal represented by the RCEP can be a dramatic driver of growth, despite
there being some challenges that remain to be addressed along the way,” Kimlong
said.
The RCEP agreement upon ratification will be the largest trade deal in the
world creating a market of 2.2 billion people, (approximately 30 percent of the
world’s population), with a GDP of close to 26.2 trillion USD (30 percent of
the world’s GDP) representing about 28 percent of world trade, based on 2019
data./.