PHNOM PENH – The Association of Southeast Asian Nations and its six regional partners, including Japan, China and India, declared Tuesday the start of negotiations for a free-trade agreement that could create a huge integrated market compromising more than 3 billion people.
The move toward creating the Regional Comprehensive Economic Partnership comes as the United States is seeking to create another vast free-trade bloc through the Trans-Pacific Partnership initiative.
If the RCEP and TPP, which is currently being negotiated by 11 countries, are created, each could be similar in economic size to the European Union. The 16 countries involved in the RCEP negotiations have a combined nominal gross domestic product of about $19 trillion, or about 30 percent of the world’s GDP.
The RCEP negotiations are expected to begin early next year and to be completed by the end of 2015. But it will be a challenge for the 16 countries with their diverse backgrounds to realize a high-quality agreement to liberalize trade in goods, services and investment.
The countries involved are the 10 ASEAN members — Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam — plus China, Japan, South Korea, India, Australia and New Zealand.
While acknowledging that the 2015 time line is “ambitious,” a Ministry of Economy, Trade and Industry official said earlier that Japan is willing to play a leading role in the multilateral negotiations as it has pushed for the ASEAN Plus Six as a forum for cooperation in Asia.
Japan is expected to benefit significantly from the free-trade initiative because it has a parts supply network in Southeast Asia and India. The official said Japan has particular interest in improving its access to the Chinese and Indian markets.
The RCEP is seen as one of the pathways toward building a regionwide Asia-Pacific free-trade area, along with other regional undertakings, including the TPP, and a trilateral free-trade initiative involving Japan, China and South Korea.
Japan has said it will promote all three of the frameworks simultaneously, but it has yet to announce its participation in the TPP negotiations, which involve the United States and Australia, amid opposition from the farming sector over fears of an influx of cheaper produce from overseas under lowered tariffs.