Wed, Nov 21, 2012 - Page 8 News List

New bloc offers golden opportunity

By Eric Chiou 邱奕宏

For various reasons, this month does not seem to be an exciting and inspiring political period, although several important political events have happened in the past few weeks.

For instance, the rejoicing over US President Barack Obama’s re-election was soon overshadowed by lingering anxiety over the stagnation of the US economy. In Beijing, without any surprise, the Chinese Communist Party (CCP) has gingerly played by the script and appointed Xi Jinping (習近平) as the party’s general secretary and the head of the Central Military Commission, completing the once-in-decade leadership transition.

In Tokyo, amid low public support and defections from his party, unsurprisingly, Japanese Prime Minister Yoshihiko Noda finally announced that he will dissolve parliament for a general election next month, which is likely to end the three-year period of Democratic Party of Japan (DPJ) rule and hand power over to the opposition, the Liberal Democratic Party (LDP).

In contrast with most people’s political apathy toward these incidents, a more encouraging development regarding the recent formation of regional economic integration advocated by ASEAN perhaps deserves more attention. This latest proposal for a regional economic bloc in Asia is expected to make its first debut in the ASEAN Plus Six Summit in Phnom Penh, Cambodia, this week.

The framework of the Regional Comprehensive Economic Partnership (RCEP) initiated by ASEAN aims to include the 10 members of ASEAN, plus China, India, Japan, South Korea, Australia and New Zealand in its first stage.

The goal of the RCEP is to consolidate free-trade agreements (FTAs) signed between ASEAN and its six trading partners by further lowering customs duties and reducing trade barriers across the region by the end of 2015, as well as to strengthen economic and technical cooperation among its participants.

After its completion, the RCEP will emerge as the world’s largest free-trade zone, surpassing any existing regional FTA bloc, such as the EU and the North American Free Trade Agreement, with its coverage of 3.5 billion people and total GDP of US$23 trillion, around 28.4 percent of global GDP.

Given its inclusion of the most dynamic economies, its gigantic economic capacity and unparalleled market potential, the RCEP has drawn a great deal of attention since its initial concept was endorsed by ASEAN leaders last year. It is widely believed that the RCEP is ASEAN’s counter proposal in response to US-led Trans-Pacific Partnership (TPP) and a trilateral free trade agreement between China, Japan and South Korea.

By advocating the RCEP as a single framework and an exclusive solution to unify and harmonize the spaghetti-like FTAs among ASEAN and its trading partners, ASEAN not only intends to resume “ASEAN Centrality” in terms of determining the pace and direction of East Asian economic integration, but it also attempts to set a unique FTA template with “ASEAN characteristics” in order to distinguish its Asian-style FTA bloc from the US-style TPP.

While the former emphasizes flexibility and takes each member’s special needs into account, the latter claims to be a “gold standard” trade agreement for next generation trade and investment issues.

Given that the TPP does not cover all ASEAN members and Asian countries, such as China, potential RCEP members are also limited to ASEAN Plus Six countries, excluding the US from the partnership. Hence, the first and foremost strategic implication of the RCEP is a new round of free-trade competition over the directions between ASEAN-led East Asian regionalism and the US-led Asia-Pacific regionalism.

This story has been viewed 1758 times.
TOP top