Regional Comprehensive Economic Partnership (RCEP) will broaden and deepen linkages to spur region's economy amid worst crisis in decades
By Charmaine Ng, The Straits Times, 16 Nov 2020
The world's largest trade pact was inked yesterday by ministers from 15 countries including Singapore, in a move likely to spur the region's economy as it battles its worst crisis in decades.
Building on existing free trade deals among members, the Regional Comprehensive Economic Partnership (RCEP) will broaden and deepen economic linkages across the Asia-Pacific, ease trade in goods and services, facilitate the flow of foreign investments, and enhance protections in areas such as e-commerce and intellectual property.
RCEP members account for 30 per cent of the world's economy and one-third of its population. They comprise all 10 Asean members and key partners Australia, China, Japan, South Korea and New Zealand.
At a leaders' summit yesterday, Prime Minister Lee Hsien Loong described the signing of the pact as a "major step forward for the world, at a time when multilateralism is losing ground, and global growth is slowing".
"It signals our collective commitment to maintaining open and connected supply chains, and to promoting freer trade and closer interdependence especially in the face of Covid-19 when countries are turning inwards and are under protectionist pressures," he said.
The pact also gives its members larger stakes in one another's success and prosperity, while helping to strengthen regional peace and security, he added.
PM Lee noted that the diversity of the participating RCEP countries shows how economies at different stages of development can come together and contribute to one another's development, as well as to the multilateral trading system.
"This diversity, and the strong links that the participating countries have with the US, Europe and the rest of the world, also reflects the inclusiveness and openness of the agreement," he added.
PM Lee joined several leaders in expressing the hope that India will be able to sign on in future, so that "participation in the RCEP will fully reflect the emerging patterns of integration and regional cooperation in Asia".
New Delhi pulled out of talks last November after seven years of negotiations following concerns over trade imbalances. Yesterday, the RCEP leaders reiterated that the door remains open for India.
Some have raised concerns that China stands to benefit the most as the group's largest economy, but ministers noted that the RCEP gives members' businesses greater access to the vast Chinese market.
Chinese Premier Li Keqiang said the signing was a victory for multilateralism and free trade, adding: "Let people choose unity and cooperation in the face of challenges, rather than conflict and confrontation."
The pact will enter into force once six Asean countries and three partners have ratified it. RCEP leaders say they will expedite their domestic processes to ratify the pact.
It will eliminate tariffs for at least 92 per cent of goods, with additional preferential market access for exports. The flow of goods will also be faster.
More companies will be able to provide services in the region, with foreign shareholding limits raised for at least 50 sub-sectors including professional services, telecommunications and financial services.
Businesses will also find it easier to navigate and integrate into regional value chains.
Asean secretary-general Lim Jock Hoi told The Straits Times yesterday that the RCEP will ensure markets are kept open, and provide much needed certainty and stability for businesses as they cope with the Covid-19 crisis. "The signing of the RCEP agreement at this time... is a demonstration of the region's strong commitment to open, inclusive and rules-based multilateralism, and confidence of the contribution of trade to post-pandemic recovery efforts," he said.
Trade and Industry Minister Chan Chun Sing, who signed the RCEP with fellow trade ministers, added about the pact: "Beyond its economic value, it is also a statement of our strategic intent to have a shared interest in each other's prosperity and success. This bodes well for the security of the region."
Easier, cheaper for Singapore companies to do business regionally with RCEP: Trade and Industry Minister Chan Chun Sing
Consolidation of production across member states, better IP protection among benefits
By Charmaine Ng, The Straits Times, 16 Nov 2020
Singapore firms will find it easier and cheaper to do business in the region when the newly inked region-wide free trade pact takes effect, said Trade and Industry Minister Chan Chun Sing yesterday.
Speaking to reporters after signing the Regional Comprehensive Economic Partnership (RCEP), Mr Chan said the agreement provides businesses with better intellectual property protection and enables them to consolidate their production across participating countries, leading to savings in cost and time.
"We expect the RCEP countries to offer themselves as an integrated market for investment, especially at a time when the global supply chains and global production chains are being reshuffled because of technology and geopolitics," he added.
Consumers, too, will see benefits with a more competitive range of products to choose from, as well as cost savings passed down from the elimination of tariffs on most goods among members, he said.
The RCEP was signed virtually by all 10 Asean members and key partners Australia, China, Japan, South Korea and New Zealand on the last day of the annual year-end Asean Summit hosted by Vietnam, which also handed over the rotating Asean chairmanship to Brunei.
Together, the RCEP countries account for 30 per cent of the global economy and one-third of the world's population. Singapore's trade value with the 14 other RCEP members has grown steadily over the years, reaching 50.4 per cent, or $515.2 billion, of the Republic's global trade last year.
The agreement's key benefits include tariff elimination for at least 92 per cent of goods traded among members, and allowing businesses to invest in fellow RCEP countries without having to meet conditional performance requirements.
As a result, businesses handling chemicals, plastics and processed food could see cost savings for their exports, especially to China, Japan and South Korea.
Express consignments and perishable goods also have to be cleared by Customs within six hours of arrival.
Non-traditional areas which are not in some existing trade pacts, such as e-commerce, competition policy and intellectual property, are also included in the RCEP.
Meanwhile, consumers' personal data will be protected when shopping or carrying out activities online, and cross-border electronic signatures and transactions more widely accepted.
The pact also provides for enhanced intellectual property protection and enforcement. For example, Singapore companies need only file a single patent or trademark application that would apply in other RCEP member countries.
There will also be greater clarity and transparency for firms seeking government projects, with members agreeing to publish laws, regulations and procedures on such opportunities.
RCEP members are also obliged to share information that may be relevant to small and medium-sized enterprises so that they can benefit from the agreement.
As for concerns some have raised about benefits being tilted in favour of larger economies, like China, Mr Chan said the RCEP will bring about mutual benefits for both Chinese companies venturing beyond the domestic market, as well as for non-Chinese companies who want to enter China.
It will also allow for both the Chinese and regional markets to be seen as an integrated market, making the grouping more attractive to global investors, and boost the competitiveness of its exports to the rest of the world, he added.
Mr Chan described the RCEP as an important geostrategic initiative that will further regional economic integration, adding that its signing is a timely boost to the region's longer-term prospects.
He also urged members to accelerate efforts to ratify the RCEP, and keep the agreement relevant in line with changing realities and evolving business needs.
Singapore Business Federation (SBF) chief executive Ho Meng Kit said the RCEP will enhance regional trade, which is key for Singapore's open export-oriented economy. "Singapore companies will be able to make use of regional cumulation to enjoy greater flexibility in sourcing from a larger pool of suppliers in the region," he said.
The pact's regional cumulation provisions allow businesses to include the use of raw materials and parts sourced from any of the other 14 RCEP markets as content originating here.
"Manufacturers will benefit from being able to qualify for preferential tariffs more easily," said the SBF in a statement. "This will boost opportunities for supply chain diversification in the region."
In a joint leaders' statement yesterday, the RCEP countries said they are expediting their domestic processes so that they can ratify the agreement, and will develop the RCEP as a platform for dialogue and cooperation on trade and economic issues affecting the region.
The RCEP will come into force once six Asean countries and three partners have ratified the pact.
The full text of the agreement is available at rcepsec.org/legal-text
East Asia takes big leap of faith with RCEP
By Ravi Velloor, Associate Editor, The Straits Times, 16 Nov 2020
And so, Asean has got it done, finally.
By the standards of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership with which the RCEP will inevitably be compared, the agreement inked yesterday between Asean and five of its key trading partners - China, Japan, South Korea, Australia and New Zealand - may look less ambitious.
Yet, given the complexity of the deal, the diversity and the different stages of development that Regional Comprehensive Economic Partnership (RCEP) economies are at, and its potential, this is one huge achievement. It makes a big statement at a time when multilateralism is under threat from trade wars and nationalistic pulls.
Indeed, it could well turn out to be a turning point for both East Asia's, and South-east Asia's, tricky relationship with China - one marked by both dazzlement over the prospects of embracing and being embraced by the world's No. 2 economy, and nervousness about its implications.
In North-east Asia, key economies like Japan and South Korea have testy ties between themselves, and with China. Talks of a free trade agreement (FTA) linking them up have not made much apparent progress since the 16th round was held in Seoul a year ago. Now, the three - and Asean states - have to deal with one another from a single rule book written that encompasses a third of the global population and 30 per cent of world gross domestic product.
"Some Asean countries got a little nervous because their dialogue partners' economies are a lot bigger than their own," said Ms Deborah Elms, executive director of the Asian Trade Centre in Singapore. "It is not the most ambitious trade deal ever signed, nor the worst. The crucial part is that once it is in place, companies will start thinking of Asia as a reasonable, final market for them. They will start getting structured for RCEP."
What's more, there are plans for an RCEP secretariat that will monitor the progress of the agreement and settle disputes. While no venue has been chosen for this body, the fact that such plans are on the anvil suggests that this could in time prove to be a momentous move. It would come against the background of the trade frictions between the United States and China, and continuing questions about the World Trade Organisation.
Just having a platform for Asian economies to assemble with partners from Australia and New Zealand would in itself be a significant development.
The RCEP's implementation - it could take as much as a year while a minimum of six of the 10 Asean states and three of five trading partners ratify it before it can be considered live - will likely coincide with an updraught for regional economies as they emerge from Covid-19. That could set the stage for years of good growth. The surge, wisely used, should also provide the elbow room for Asean economies to swiftly improve their competitiveness to meet the inevitable manufacturing challenge from powerhouse China.
ENORMOUS DOCUMENT
To get a sense of what was just achieved, look at the enormity of the RCEP document, produced after 31 rounds of negotiations, 15 trade negotiating committee meetings and 19 ministerial rounds over an eight-year period.
More than a mere free trade deal, this truly is a "comprehensive" agreement. It rests on a tripod of trade in goods, trade in services and electronic commerce and runs to more than 14,000 pages with 20 chapters, plus annexes and schedules. The signatories include advanced economies like Singapore, Japan and Australia, upper middle income economies such as Malaysia and Thailand, and less developed countries such as Laos and Cambodia.
Asean states first had to negotiate common positions between themselves, then take those consensus positions to the dialogue partners, some of whom wanted ambitious goalposts set for intellectual property, e-commerce and government procurement rules. The last would have been particularly tricky, especially for nations that run coalition governments, because ministerial portfolios are often sought and allotted based on the ability to hand contracts to key supporters.
During the lengthy negotiations, several participating states held elections and some saw government changes, with new leaders often stressing different priorities.
Last November, just when everyone thought a deal was in sight, India announced a stunning pullout. In part that was because of fear of being overrun by cheaper factory goods from China and farm produce from Australia and New Zealand but it was also because its demands on opening services trade, where it enjoys a measure of competitiveness, were not met to its satisfaction.
Shortly after that setback, Covid-19 began to blow through the world, disrupting economies and supply chains.
With all those headwinds to navigate, the RCEP still is a solid win for Asean. In terms of market access, it has won additional access in trade in goods from the giant economies of China, Japan and South Korea - beyond what Asean Plus One trade deals had offered thus far. The simplification and consolidation of rules garnered from multifarious FTAs that mark the RCEP is a gain for companies, which can choose whether they want to claim market access under RCEP, or continue using standalone host-country FTAs with partners as exist.
COMPROMISES
Needless to say, the urge to somehow paper over conflicting pulls has involved compromises. Where FTAs between some key economies do not exist, as between China and Japan, those economies seem to have been willing to give Asean more benefits than to each other - and South-east Asia is not complaining.
Likewise, negotiators on the e-commerce track have reportedly produced only what in diplomatic speak is called a "balanced outcome", meaning they wish they could have done better. While there is assurance that personal data will be protected when shopping online, there are questions over the validity and acceptance of electronic signatures in some countries.
This is a pity. According to a report last week from Google, Temasek and Bain & Co, South-east Asia's Internet sectors could reach US$100 billion (S$135 billion) in gross merchandise value (GMV) this year, with e-commerce registering 63 per cent growth while the online travel segment contracted almost as much. Overall, the region's Internet sectors remain on track to cross US$300 billion in GMV by 2025.
Still, there now is a chapter in the RCEP exclusively on e-commerce. That provides a landing zone for future negotiations on the subject as when the RCEP comes up for review in five years' time.
Likewise, in classic Asean style, negotiators seem to have sidestepped some sensitive issues by parking them in the "work agenda" - short for shelved for future discussions. One such topic was the issue of investments and disputes settlement, which helped clinch the investment chapter. The fear was that aggrieved companies may have been able to take governments to court far too easily. Still, RCEP countries are now committed to enhanced investment rules and disciplines.
India's last-mile decision to drop out also was a crushing disappointment, especially to Singapore, which had assiduously worked to keep Asia's third largest economy within the RCEP. It did so despite demands from New Delhi that would have rendered the agreement almost meaningless, including additional rules of origin for thousands of product lines. Still, the 15 signatories, China included, have told New Delhi that the door remains open for it to rejoin RCEP.
For trade-driven Singapore, the very act of 15 economies joining to push trade is in itself a huge victory, even if the benefits to it may not be immediately visible given that the Republic has its own quality deals with so many nations. Singaporeans who cast a wary eye on services agreements out of fear they will lead to an influx of foreign talent can rest assured that nothing in the RCEP allows that to happen. On the other hand, it opens up opportunities for a host of Singaporean services companies to move into East Asia. Some two-thirds of service sectors will be fully open with increased foreign shareholding limits, including in professional services, telecommunications, financial services and logistics.
Much of the RCEP's future will depend on how the 14 smaller economies adjust to China being front and centre in the grouping. Thus far, it appears to have taken a helpful posture in negotiations.
If China can hold that line post-implementation, the RCEP may undo much of the perception damage caused by its assertive military and often-flinty diplomacy. Make no mistake: This deal is as much about geostrategy as geoeconomics.
Asean played central role in driving RCEP trade pact, contrary to perception it is China-led
By Lim Min Zhang, The Straits Times, 28 Nov 2020
Depending on the media outlets people read or watch, they get different impressions of the significance of the signing of the world's largest trade pact on Nov 15.
A New York Times report was headlined "China-led trade pact is signed, in challenge to US", while China nationalist tabloid Global Times ran an opinion piece titled "RCEP will end US hegemony in West Pacific".
Singapore's Prime Minister Lee Hsien Loong described it as a major step forward for the world, "at a time when multilateralism is losing ground, and global growth is slowing", in remarks carried by The Straits Times and Financial Times.
Some reports and analysts have described the eight-year negotiation process as driven or led by China, a point observers and diplomats ST interviewed say is inaccurate.
Veteran diplomat Barry Desker called such media coverage misleading.
"Asean's leadership enabled the conclusion of the agreement. Without Asean, a broad agreement of this nature would not have been concluded among the non-Asean members. The signing at the Asean Summit demonstrates Asean's convening power."
Also, the Regional Comprehensive Economic Partnership (RCEP) is the first such agreement jointly concluded by China, Japan and South Korea at the regional level, added Ambassador Desker, a distinguished fellow at the S. Rajaratnam School of International Studies in Nanyang Technological University.
"Strategic rivalry and historical animosities have prevented these East Asian states from embarking on such negotiations and have been a barrier in the staging of trilateral summits. With RCEP, the stage is now set to begin negotiations for a trilateral East Asian agreement," said the ambassador, who was previously chief executive of the Singapore Trade Development Board, the predecessor of Enterprise Singapore.
It is also notable that many RCEP features are like those of existing Asean Free Trade Agreements (FTAs), including the rules of origins as well as special and differential mechanisms, points out Dr Amitendu Palit, senior research fellow and research lead (trade and economics)at the Institute of South Asian Studies in the National University of Singapore (NUS).
'Why Asean mooted idea for RCEP in 2011'
Asean has FTAs with China, India, Japan, South Korea, Australia and New Zealand - all of whom are RCEP signatories, except India which pulled out last November because of concerns that lower tariffs might lead to a flood of imports that would hurt its domestic industries.
But former Asean secretary-general Ong Keng Yong said that when the RCEP idea was mooted at the 2011 Asean Summit, the most compelling reason for Asean to do it was to standardise the definitions, processes and timeliness in the six separate FTAs the grouping has with six nations.
Also, it was to push those in Asean who were slow in implementing the agreed measures for the grouping's own economic integration, he said.
"The thinking was that a huge free trade area for Asean member states to export to and to import from would incentivise Asean governments to accelerate Asean Economic Community implementation."
Associate Professor Simon Tay, who teaches international law at NUS and is chairman of the Singapore Institute of International Affairs, agrees: "It was Asean that crafted a framework of principles to guide the (RCEP) process forward with its other partners. This prior preparation by Asean and the long and challenging path shows that RCEP was never the case of China or any single country dictating terms."
Mixed views on whether China will gain the most
Observers, however, acknowledge the possible perception that China could benefit significantly, both economically and politically, as it the largest economy in the pact.
Dr Malcolm Cook, a visiting senior fellow at the ISEAS-Yusof Ishak Institute, said the RCEP is a big win strategically for the Chinese, as it supports Beijing's rhetoric that China is in favour of greater economic integration.
"The US' withdrawal from the Trans-Pacific Partnership in 2017 as a point of contrast simply adds to this China benefit."
The RCEP is also a big win strategically for Asean, which delivered on its rhetoric of regional centrality and support for greater economic integration, he added.
Ambassador Desker takes a different view on what China stands to gain.
He said it is likely that RCEP members will see the trade pact as a means of influencing and shaping Chinese trade policy.
Prof Tay believes economic cooperation can be a win-win proposition. In particular, having common rules of origin will lower costs for businesses and incentivise some to relocate parts of their supply chain to Asean, he added.
While the RCEP did not make significant progress compared to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in areas such as intellectual property, labour standards, the environment, government procurement and state-owned enterprises, these issues will form part of the new Asia-Pacific trade agenda, said Ambassador Desker.
"Expect pressures to move in this direction when future RCEP negotiations are held," he said.
Prof Tay noted that the RCEP "is a win for multilateralism and international order, especially at a time of growing protectionism globally".
He added: "With world trade slowing in volume and value and the World Trade Organisation under scrutiny, RCEP stands out as an exception."
How RCEP, the world's largest trade pact, benefits Singaporeans and businesses
Firms can enjoy preferential tariffs, other cost savings that will be passed on to consumers
By Grace Ho, Senior Political Correspondent, The Straits Times, 28 Nov 2020
Say you are a company producing mutton curry in Singapore.
With the newly signed Regional Comprehensive Economic Partnership (RCEP) trade pact, you can buy ingredients such as mutton and curry paste from 14 other countries and still have the final can or packet of the dish count as made in Singapore.
This will be more cost-effective for two reasons.
First, the ingredients bought from the other RCEP countries are considered to be originating in Singapore when determining their origins to enjoy preferential tariffs.
Second, perishable goods can be cleared by Customs as swiftly as within six hours of arrival .
Singaporeans will also be able to enjoy cheaper mutton curry when the cost savings are passed on to them.
This cascade of benefits is an example of how RCEP - the world's largest trade pact, inked on Nov 15 - will impact businesses and consumers here.
Involving the 10 Asean members, plus China, Japan, South Korea, Australia and New Zealand, the RCEP covers nearly one-third of the world's population and contributes around 30 per cent of the world's gross domestic product.
One of its key achievements is that it eliminates tariffs for about 92 per cent of goods traded among the members.
A SINGLE RULE
But the biggest benefit for Singapore is the presence of a single rule for each product that applies across all 15 parties to the RCEP, said Ms Sulaimah Mahmood, the chief RCEP negotiator at the Ministry of Trade and Industry.
Previously, different countries had different rules, she added. "If you exported to South Korea, there was one rule; if you exported to Japan, there was another."
Each of Asean's trade agreements has different rules of origin.
For example, if a company in Vietnam makes a bicycle, it may be eligible for preferential market access under a trade deal with Japan, but may need different components or manufacturing process to be eligible under a deal with South Korea.
"We thought: What would be the best way to consolidate the rules so that it's easier for our companies?"
Besides a single rule, there is also the cumulation of rules of origin, which sets out how much regional content a product must have before it can enjoy lower tariffs.
Before the RCEP was concluded, many businesses in Singapore could tap only the existing Asean Plus One free trade agreements (FTAs) or the trade agreements between the 10-member regional bloc and individual dialogue partners such as Japan, South Korea and China.
Now, RCEP has thrown the door wide open. Businesses can source inputs from any of the 14 other RCEP members, said Ms Sulaimah.
FOOD, AUTOMOTIVE SECTORS TO BENEFIT MOST
While RCEP allows for broader sourcing by companies, preferential tariffs are likely no better than those already on offer under other FTAs, like the Asean Plus One FTAs, said PwC's Asian Worldtrade Management Services managing partner Frank Debets.
"Only if companies require broader cumulation of originating materials, or if they trade extensively between Japan and China or Korea, would the RCEP likely be of more significant benefit to them."
China, Japan, and South Korea have been trying to reach their own trilateral FTA for years.
Mr Debets added that industries with traditionally higher rates of Customs duties, such as food and agriculture, automotives and consumer electronics, stand to benefit the most.
But each company will need to do its own homework to determine the exact benefits, which tend to be product-specific and not industry-specific, he added.
Mr Alex Capri, visiting senior fellow at the National University of Singapore Business School, said members have made impressive commitments around e-commerce, digital services, intellectual property (IP) protection, dispute settlement and other areas critical to digital trade.
These are areas that align with Singapore's objectives to be a global hub for the knowledge and digital economy.
"The RCEP would seem to be beneficial to small and medium-sized enterprises (SMEs), as the digital economy still presents SMEs with significant barriers for cross-border trade," he said.
"Thus, these provisions, if actually implemented, would be very good for Singapore's fintech, clean tech, logistics and other sectors."
BUILDING AWARENESS AMONG BUSINESSES
PwC's Mr Debets, however, cautioned that RCEP may not be top of mind for businesses because it is still subject to ratification, and it may take more than a year before the pact takes effect.
"Judging by experience, it may mean that companies don't see the urgency and forget about the agreement, even when it does ultimately come into force," he said.
The agreement will take effect after six Asean nations and three non-Asean countries ratify it.
Singapore Business Federation chief executive Ho Meng Kit said businesses could start by reviewing their existing supply sources and considering new markets.
"Those in services trade should also take a critical look at RCEP's more liberal services market access commitments, e-commerce provisions and IP protection clauses to identify opportunities where they can gain a competitive advantage in this fast-growing region," he said.
He added that the federation is planning a series of outreach activities, starting next month, on the benefits of the agreement.
The business development director of food marketer, importer and distributor San SeSan, Mr Gary Lee, said his company, in anticipation of RCEP, has realigned its supply chain to mitigate the impact of the United States-China trade war.
It aims to tap RCEP to export to Japan and South Korea under lower or no duties, and also to expand into the Chinese market, he added.
"Our joint venture factory based in Thailand expanded its capacity in a shift away from US-origin goods, so that we can avoid the high import duties on US products to China.
"Conversely, we observe that many China-origin products are similarly starting to shift to factories in Asean to support exports to the US."
Mr Lee also hopes that RCEP will strengthen IP, to counter what he observes has been a proliferation of Chinese companies registering unrelated trademarks that are similar to existing brands.
RCEP negotiators recount twists and turns in 8-year journey to world's biggest trade pact
By Grace Ho, Senior Political Correspondent, The Straits Times, 28 Nov 2020
Ms Sulaimah Mahmood recalls with bracing clarity the moment last year when India dropped the bombshell that it would pull out of the Regional Comprehensive Economic Partnership (RCEP).
Eight years' worth of hard-fought negotiations flashed past the eyes of Singapore's chief RCEP negotiator, as Indian Prime Minister Narendra Modi said his "conscience" would not permit him to let India join the mega trade pact.
"I literally froze from shock and disappointment," said Ms Sulaimah, 63, a senior director at the Ministry of Trade and Industry (MTI).
Teams from all 16 participating countries had gathered in Bangkok and worked past midnight, on the eve of India's bombshell announcement, to iron out the final kinks. New Delhi had faced intense domestic opposition, out of fear that an influx of cheap Chinese goods would decimate its infant industries.
But there had been no sign from India that it would take the drastic step of walking away, said Ms Sulaimah who, with five other negotiators from MTI, spoke to reporters on Wednesday.
One of them, Ms Giselle Lee, 27, said a key worry was that India's withdrawal would trigger a domino effect and cause other parties to pull out, as some had been very keen to have India on board.
India's pullout was just one of the many twists and turns in the RCEP journey that was steered by Asean, said Ms Sulaimah.
She was quick to clarify the narrative in some international media that the process was China-led.
Although the RCEP negotiations were officially launched only in 2012, Asean had begun to think about the emerging regional architecture as far back as 2006.
This was after it had completed all its Plus One free trade agreements (FTAs), which refer to its trade pacts with individual nations like China, Japan and South Korea.
Said Ms Sulaimah: "What we've done with RCEP is to have one rule for each product that each country can use for the other 14 parties."
The grouping also came up with a set of guiding principles and objectives for the trade pact in 2012.
Ms Sulaimah said the reality is that agricultural products like rice and sugar continue to be sensitive for some Asean members. Many are keen to protect their farmers from a potential influx of cheap imports. At the same time, countries that did not have FTAs with each other then, such as China, Japan and South Korea, were locked in bilateral talks, which added to the complexity of negotiating RCEP.
Automotives were another sticking point, since there are many major automotive producers in the region, said Mr Tay Lide, 33, who negotiated the goods, services and investment chapters of the RCEP.
He noted that most countries had difficulty retaining the same set of negotiators for the eight years. "Every time someone moves and we deal with a new personality, it is a new process of trying to gain trust."
The 46-strong Singapore team is a mix of old and new faces from across government agencies.
Given the growing importance of digital trade in Asia, many had hoped RCEP would include stronger provisions that would lower barriers for e-commerce.
While Singapore, too, wanted a more ambitious e-commerce chapter, one must understand some of the least developed economies did not even have e-commerce regulations to begin with, said Ms Sulaimah. "But we managed to reach a landing zone where we said: 'Okay, let's conclude this because if we continue for another two or three years, it will not get better.'"
* Singapore first among RCEP participating countries to ratify world's largest trade pact
By Choo Yun Ting, The Straits Times, 10 Apr 2021
Singapore has ratified the Regional Comprehensive Economic Partnership (RCEP) and deposited its ratification instrument, becoming the first participating country to complete the official process.
All 10 Asean members and key partners Australia, China, Japan, New Zealand and South Korea signed the trade pact, the world's largest, at the 4th RCEP Summit last November.
Trade and Industry Minister Chan Chun Sing said in a statement yesterday that the Republic's expeditious ratification of the agreement signals the country's strong commitment to strengthening its trade and economic linkages with its partners, which will benefit its businesses and people.
He added: "We look forward to our fellow RCEP participating countries doing likewise, to expedite the entry into force of the agreement."
The agreement will enter into force 60 days after it has been ratified by at least six Asean member states and three non-Asean signatories and their instruments of ratification, acceptance or approval have been deposited with the Asean secretary-general, who has been designated as the depositary for the RCEP agreement.
RCEP participating countries are targeting for the pact to enter into force on Jan 1 next year.
Singapore deposited its instrument of ratification yesterday, the Ministry of Trade and Industry (MTI) said in the statement.
While China and Thailand have completed their domestic ratification processes, they have yet to deposit their instruments of ratification with the Asean secretary-general. In February, Japan's Cabinet approved a Bill to ratify the trade agreement.
The RCEP builds upon existing trade deals among its 15 member countries, which together account for 30 per cent of the global economy and one-third of the world's population.
It will ease goods and services trade, facilitate the flow of foreign investments, and enhance protection in areas such as e-commerce and intellectual property.
The RCEP will eliminate tariffs for about 92 per cent of goods on average, with additional preferential market access for specific products like plastics and mineral fuels in selected markets such as China, Japan and South Korea.
Under the agreement, more companies will be able to provide services in the region, with foreign shareholding limits raised for at least 50 sub-sectors, including professional services, telecommunications and financial services.
A more transparent approach will also allow for greater certainty for businesses.
Other benefits of the trade deal include simplified procedures for more efficient clearance of goods, including the release of express consignments and perishables within six hours.
Businesses will also be protected from anti-competitive activities through competition law regimes and cross-border enforcement cooperation.
The trade pact will complement Singapore's existing network of free trade agreements, expand its economic space, and boost trade and investment flows, MTI said.
The ministry has been working actively with various business associations and chambers to organise outreach sessions and webinars to support the local business community in understanding the RCEP agreement and how they may benefit from it when it enters into force.
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