Environment, labour concerns delaying China-backed free trade pact

SINGAPORE (AFP) – China-backed efforts to create the world’s biggest free trade area are being held up by a push to include protection for workers and the environment, a senior Thai diplomat said yesterday.

The 16-country Regional Comprehensive Economic Partnership (RCEP) has been hailed as an antidote to Trump-era protectionism, particularly after the United States (US) leader pulled his country out of the Trans-Pacific Partnership (TPP) to pursue his ‘America-first’ agenda.

But the much-trumpeted TPP rules on environmental protection, worker rights and government procurement are absent in the RCEP, leaving many wondering how free trade will be conducted under a Beijing-supported agreement.

Some RCEP members are pushing to have these provisions included in the RCEP as well, said Deputy Permanent Secretary at Thailand’s Foreign Ministry Arthayudh Srisamoot at a forum in Singapore.

“People are bringing in new issues. They are not talking about trade and investment liberalisation or trade facilitation anymore,” he said.

“You have environment policies, labour policies… human rights, government procurement. These new issues are complicating the existing negotiations.”

In January 2017, Donald Trump pulled the US out of the TPP, with Beijing backing efforts led by the Association of Southeast Asian Nations (ASEAN) to formulate a rival free trade area.

Bangkok will try to push for a conclusion of the main meat of the pact under its ASEAN chairmanship this year, Arthayudh said at Singapore’s ISEAS Yusof Ishak Institute.

ASEAN has driven the RCEP, which includes the bloc’s 10 members plus China, Japan, India, Australia, New Zealand and South Korea. It will be the world’s biggest free-trade pact when concluded.

Current RCEP disagreements also centre on the extent to which countries would open up their markets, with bigger states taking a cautious approach until they see the benefits they would get in exchange, Arthayudh said.

He acknowledged that finalising the pact – originally slated to be signed in 2015 – needed to happen soon.

“We are still aspiring to conclude it this year, we’re trying to give it a push,” he said. “If we don’t have an agreement soon… people will probably lose interest in getting this FTA,” he said.