| Chen Jipeng |
SINGAPORE (Xinhua) – The many free trade agreements and talks in the Asia Pacific will be in the spotlight in the coming year as breakthroughs or at least major progress are expected for some of them.
Scholars have said that the regional integration is also a process of economies integrating into a world of supply chains.
Supply chains are bigger and deeper than what most people think they are. The services and investment flows attached are significant, said Doborah Elms, executive director of Singapore- based think tank Asian Trade Centre in a recent interview with Xinhua.
“In a world of supply chains, countries that are successful in eliminating barriers to trade for supply chain purposes will do much better than countries that don’t,” she said.
The Association of Southeast Asian Nations (Asean) is aiming to achieve an Asean Community by the end of 2015. The 10-nation bloc has introduced a scorecard as a compliance tool to gauge the progress in building the Asean Economic Community, a key pillar of the bloc’s community building.
Leaders have said that some 85 per cent of the goals have been achieved. Nevertheless, they also acknowledge that the remaining 15 per cent will be the most challenging ones to achieve.
Kaewkamol Pitakdumrongkit, an assistant professor at Nanyang Technological University, said that the work has been mostly done on tariff reduction and that the targets remaining to be achieved are mainly those in areas such as non-tariff barriers, services trade, investment liberalisation and free flow of skilled labour.
Asean officials have recently said that 2015 will be a milestone in a continuing process rather than an end. The bloc is already in the process of developing a blueprint for the next stage of community building.
In developing the blueprint, the bloc is expected to take into consideration the changes in the global economic landscape, while carrying on with the unfinished part of the commitments in the current blueprint beyond 2015.
Kaewkamol sees the deepening of the regional production and supply chain as the most significant change in the coming decade. She expects Asean to take this into consideration in developing its new blueprint.
China and Asean have launched talks to upgrade an existing free trade agreement, with emphasis on services trade and investment liberalisation. China has proposed concepts and arrangements, too, including the 21st Century Maritime Silk Road and the Asian Infrastructure Investment Bank.
Another agreement to watch is the Regional Comprehensive Economic Partnership (RCEP), which involves Asean and six partner economies. The target is to complete the free trade talks within 2015. Some said this will not be easy, as the participants are still discussing the approach and the modality of the talks and that market access may be a challenging issue with some economies. But the political will is there, as the participants have recently reiterated the aim to complete the talks within 2015.
The Trans-Pacific Partnership (TPP) will continue to make headlines, too. Scholars are divided on the prospect for the controversially ambitious free trade deal.
Termsak Chalermpalanupap, a researcher at the Institute of Southeast Asian Studies, Singapore, sees the process stuck. It is believed that the TPP talks are stuck on market access issues like rice, beef, sugar and dairy and the differences in intellectual property right protection.
The TPP negotiators would have to conclude the talks by March, given the fact that the agreement has to be submitted for a vote in the United States before the Congress’ summer break. After that, it will be the presidential election cycle and lawmakers would be in no mood to vote on a trade bill.
Deborah Elms, however, insists that the negotiators are “very close” to concluding the talks.
“I don’t think that finishing the TPP is difficult in the sense that there is too much to do between now and March or it couldn’t be concluded by March because it takes too long to do the legal scrubbing,” she said.
She said that the negotiators are stuck partly because they cannot come down from the high standards they have set in the beginning for a 21st-century high quality free trade agreement. They may announce a conclusion if they want to.
“This is a gut check time,” Elms said.
Most of the economies in the Asia Pacific, the world’s most dynamic region, are negotiating bilateral free trade deals, too. They can expect to benefit from the comparative advantage as well as reduced costs. Singapore, for instance, has quite a number of such agreements with other economies.
China recently announced the conclusion of substantial talks over free trade agreements with South Korea and Australia, respectively. Observers said these may be incentives for other economies to accelerate their free trade talks.
There are differences in the levels of integration represented by the various regional free trade agreements including the TPP, the RCEP, as well as the reinvigorated Free Trade Agreement of the Asia Pacific (FTAAP).