ASEAN

RCEP: A First Look at the Texts

RCEP: A First Look at the Texts

The 15 countries in the Regional Comprehensive Economic Partnership (RCEP) held an elegant virtual signing ceremony on November 15, 2020. The Asian Trade Centre will be delving more deeply into the specific details and producing a series of materials to help companies get ready to use the agreement. For now, here are our first quick technical assessments of the agreement. Note that this early look should not be taken as the definitive guide, as an agreement with 20 chapters and thousands of pages of associated schedules will take some time to unravel. To get a sense of the task ahead, the Korean tariff schedules alone run to 2743 pages. Compounding the difficulties of making a quick assessment: governments can be quite creative in burying important details inside of different provisions. Flexibilities and exceptions are going to be tough to note, understand and unravel. RCEP will, of course, have important implications for trade in the region, for economic integration and for the future of trade policy. This post, however, will focus on the details of the agreement itself. The basic structure includes 20 chapters, making RCEP a comprehensive trade agreement that includes commitments in areas like goods, services, investment, intellectual property rights, competition, trade remedies, standards, e-commerce and dispute settlement. Many of these chapters were not included in the underlying ASEAN+1 agreements that formed the original core of RCEP. Getting these negotiated took significant time, which is partly why RCEP has taken 8 years to reach conclusion. Overall, RCEP represents a significant achievement. The 15 countries involved (Australia, Brunei, Cambodia, China, Indonesia, Japan, Lao PDR, Malaysia, Myanmar, New Zealand, Philippines, Singapore, South Korea, Thailand, and Vietnam) are very diverse in nearly every imaginable dimension. Getting an agreement that could successfully navigate the domestic constraints and starting points in all 15 countries is an important accomplishment. RCEP also represents the first time that many members have engaged in this sort of trade arrangements: especially between China, Japan and South Korea. As expected, this created additional friction as officials grappled with managing outcomes.

The Critical Role of Qualifications in Supporting Student and Worker Movements

The Critical Role of Qualifications in Supporting Student and Worker Movements

It is therefore necessary to have some common standards and qualifications in order for governments to adequately assess the opportunities and risks that can come with the movement of any specific individual. But this is easier said than done. In regions like ASEAN, governments have adopted different approaches to the management and recognition of qualifications and qualification bodies. Some ASEAN member states have established comprehensive National Qualifications Frameworks (NQF) the provide a comprehensive overview of the structures and activities that led to the award of qualifications and recognition of learning outcomes, while others have yet to develop national qualification system at all. This makes it challenging to understand, compare and evaluate qualifications between countries. An inability to reference, compare and recognize different qualification systems will become more complex in a post-COVID environment, with the proliferation of academic and professional online learning. While online education opens the door to thousands of professional and academic certifications across the world, it also complicates the process of certifying and recognising multiple qualifications.

Bright Spots for Trade in Asia

Bright Spots for Trade in Asia

Two other important groupings have important milestones in August. The members of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) are meeting on August 5. The CPTPP, which still has no Secretariat to manage this sprawling and complex trade agreement, is instead driven by a series of meetings across the year by government officials working on various aspects of the deal. The primary mechanism for oversight is the CPTPP Commission, which will be held virtually under Mexico’s chairmanship this year. The Commission meeting should be notable for a few reasons. First, it is an opportunity to celebrate the achievements of the agreement after more than 18 months in operation. While trade flows remain depressed under the pandemic, governments like Vietnam have taken advantage of the opportunity to expand knowledge. Vietnam held 577 seminars and workshops in 2019 alone to encourage the proper utilization of the CPTPP by firms of all sizes across the country. Second, the Commission will review any issues that have emerged in implementation. An agreement that runs to nearly 600 pages with thousands of country-specific commitments is bound to have a few issues. As a simple example, a typo in one of the letters mentioned yams instead of yarn.

RCEP: 15-1 Equals What?

RCEP: 15-1 Equals What?

The other 15 parties appear to have decided that delay was no longer possible and further negotiations were not likely to resolve such fundamental issues.  They decided to close the agreement and move towards signature and entry into force .  The door has been left ajar, of course, as negotiations can still take place.  India could join by February or potentially after that time. Much of the focus in the last two days has been on the situation in India.  This is understandable, but also somewhat unfortunate, as it has obscured the importance of the RCEP announcement. Leaders have pulled off what many believed was an impossible task—in spite of strong global headwinds, 15 Asian countries managed to agree on a significant new trade deal that will lead to new integration in the region.   The 15 are an extremely diverse bunch from rich to least developed economies, from large to tiny, from agricultural powerhouses to industrial manufacturing centers and resource based economies.  The agreement is not, as so many have described, a shallow, meaningless deal.  It covers the full range of topics of importance to companies and consumers, including goods, services, and investment.  It addresses issues like intellectual property rights and standards.  It has elements on smaller firms and development. 

RCEP: Reaching Substantial Conclusion?

RCEP: Reaching Substantial Conclusion?

Missing from all this cooperation, however, has been a mechanism to integrate the whole of Asia together in a meaningful way.  RCEP provides this template.  “Substantial conclusion” will not mean that people will be eagerly reviewing the texts and schedules on November 5.  There are two reasons for a delay in seeing the contents.  First, officials have been frantically switching, dropping and including provisions over the past few weeks in the sprint to the finish line.  Most of these elements have been under discussion for years.  RCEP officials started working on the deal at the end of 2012.  However, in the final push to get an agreement done, sensitive items actually have to get addressed and dealt with one way or another.  To ensure consistency across the document, the lawyers will need to carefully review the entire deal from start to finish.  The need for a careful legal scrub is not unique to RCEP.  Most trade agreements require something similar and ought to be welcomed by all.  The worst outcome would be to have a deal riddled with flaws that need correction later.