Asean economic ministers optimistic on upgrading pacts

Asean economic ministers optimistic on upgrading pacts

The Asean Economic Ministers (AEM) group wants to upgrade existing free trade agreements (FTAs) and accelerate the enforcement of the Regional Comprehensive Economic Partnership (RCEP) trade pact among all members, aiming to revive the regional economy amid the Covid-19 crisis.

According to Trade Negotiations Department director-general Auramon Supthaweethum, the economic ministers are expected to discuss restoring the Asean economy amid the pandemic and Asean strategies for economic relations with non-Asean countries at the 28th AEM Retreat, which is scheduled to take place today and tomorrow via video conference.

“Cambodia, as chair of the Asean meeting, wants all Asean members to work together to start negotiations to upgrade the Asean Trade in Goods Agreement and existing FTAs, especially the Asean-Australia-New Zealand FTA, and accelerate the enforcement of RCEP for all members,” she said.

Among Asean members, only Indonesia, Myanmar and the Philippines have yet to submit their RCEP ratification to the Asean Secretariat.

RCEP is larger than the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the EU, the Mercosur trade bloc in South America as well as the recent US-Mexico-Canada FTA. As the world’s biggest FTA measured by GDP, RCEP came into force early this year having been ratified by at least six Asean members and three other signatory countries.

RCEP is the first multilateral agreement to include China and the first FTA between China and Japan as well as between Japan and South Korea.

Together, RCEP’s 15 participants account for a combined population of nearly 2.3 billion (30.2% of the world’s population), with 33.6% of the world’s GDP and about 30.3% of global trade.

RCEP is designed to remove tariffs on 91% of goods and standardise rules on investment, intellectual property and e-commerce, among other trade practices. It aims to create an integrated market with 15 countries, making it easier for products and services from each of these countries to be available across this region.

The Commerce Ministry estimates Thailand has 39,366 goods that would benefit from duty reduction (South Korea has 11,104 items, Japan 8,216 items, China 7,491 items, New Zealand 6,866 items, and Australia 5,689 items). Thailand has 29,891 goods that should enjoy zero tariffs immediately after the pact’s implementation, said the ministry.

The other items are scheduled to see tariffs gradually reduced to zero over the next 10-20 years.

In 2021, the trade volume between Thailand and Asean tallied US$111 billion, up 17.1% from a year before. Of the total, exports accounted for $65 billion, up 17.2%, and imports were valued at $45.8 billion, up 16.9% from 2020. Important exports included rubber and rubber products, computers and components, electronic parts and pet food.