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11 Oct 2013

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[AEC Plus] Eyeing on RCEP Meeting in 2013 ASEAN Summit; USD130 billion Expected in Thai-RCEP Trade (Current Issue No. 2415 Full Ed.)

The 2013 ASEAN Summit at Brunei Darussalam, October 9-10, will be an arena where the first “Regional Comprehensive Economic Partnership” (RCEP) Summit takes place. Included on the agenda is a follow-up to the RCEP Trade Negotiating Committee (RCEP-TNC) that has met twice this year prior to the summit[1].
The most recent meeting had concluded that the RCEP's purpose would be to achieve trade partnerships among participating countries within a consistent scope and conditions to attain uniformly equitable practices. Progress has been most satisfactory in areas concerning free trade with the launch of a working group overseeing regulations over product origin, customs procedures and trade facilitation. The RCEP framework focuses on broader and deeper engagement into liberalization than previously discussed with ASEAN+1 dialogue partners (that comprise China, Japan, South Korea, India, Australia and New Zealand). Framework negotiations have been scheduled to wrap up by 2015 in time for liberalization in 2016. The third round of RCEP-TNC negotiations in Malaysia, January 2014, will be particularly interesting since it is expected that this round may produce a more concrete basis for liberalization.
As the RCEP negotiations – being one of the world's largest trade partnerships – are still in their early stages, Thailand should hone in on progress toward economic cooperation among the 16 member countries to gain the highest benefit from such pacts. With a combined GDP accounting for 28 percent of the world's total and a market of 3.3 billion consumers, the RCEP has increasingly drawn attention to the Asia Pacific rim.
Participating RCEP countries are greatly important to Thailand in that they are export markets and sources of investment, tourists and particularly international trade that is gaining momentum. The key to a brighter outlook will be gradual liberalization between ASEAN and dialogue partners that began in 2010, currently boosting our exports to RCEP members to 57 percent of our overall global total. During 8M13, Thai shipments to these nations totaled USD87.31 billion, growing 3.0 percent YoY – relatively good performance compared to our overall outbound trade that gained only 1.0 percent YoY. Primary products to RCEP countries include autos and parts, petroleum products, plastic resin, computers and parts, rubber, rubber products, steel, machinery and circuit boards.
From now on, KResearch believes that mutual economic partnerships between Thailand and RCEP countries will be strengthened, particularly in trade. Overall for 2013, the total RCEP trade value is projected to reach USD131 billion, expanding 2.5 percent YoY, or within a range of 1.7-3.2 percent YoY, equivalent to a value of USD130-132 billion.

Looking ahead, the liberalization of investment, trade in services, etc., should proliferate in 2016, and would thus help strengthen economic relationships between Thailand and RCEP countries in various aspects. Japan will likely continue to be our most substantial investor, while China, apart from its significant role in trade, will make sizable investments, too, pushing for a closer economic and trade relationship between RCEP and Thailand.



[1] RCEP negotiations will be made via meetings of the RCEP-TNC committee, the main working group, that have been held several times a year; updates will be reported at the annual RCEP summit.

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