Global experts and leaders called for higher utilization rates under the Regional Comprehensive Economic Partnership, or RCEP, and making collective efforts to unleash the full potential of the framework for economic prosperity for all.
“ASEAN members have rather low utilization rates of RCEP, which constrains the realization of the agreement’s benefits,” said Ong Tee Keat, president of the Belt and Road Initiative Caucus for Asia Pacific in Malaysia.
Speaking at a panel discussion during the Boao Forum for Asia held in Bangkok Tuesday, he said so far there’s no official data on all the member countries’ utilization rates under the framework. A mechanism should be created to facilitate better functioning of the framework, he added.
As the world’s largest trading bloc, the RCEP comprises 15 Asia-Pacific countries, 10 member states of the ASEAN, China, Japan, the Republic of Korea, Australia, and New Zealand.
Since the agreement came into effect on Jan 1, 2022, it has been driving and reshaping the landscape for economic globalization with a framework that aims to lower trade barriers and secure improved market access for goods and services for businesses in the region.
According to data from the Vietnam Chamber of Commerce and Industry, Vietnam’s total exports to the RCEP region in 2022 amounted to $146.502 billion, with RCEP preferential exports reaching $980 million. It accounts for an RCEP export utilization rate of less than 1 percent.
Studies indicated the utilization rates for China’s exports and imports were 4.21 percent and 1.46 percent, respectively, last year.
The minimum tariff differential with other trade agreements is among the factors leading to a low policy utilization rate, said Yose Rizal Damuri, executive director of the Centre for Strategic and International Studies in Indonesia.
“A smart system should be adopted to assist in the implementation and make the whole process simpler,” he added.
Beacon of stability
Amid economic uncertainties and persistent downward pressure, the RCEP stands as a beacon of stability, said Jittima Nakamano, director of the Bureau of ASEAN Economic Community under the Department of Trade Negotiations, Thai Ministry of Commerce.
As Thailand’s biggest trading partner for nine consecutive years, China’s proactive high-level opening-up to ASEAN will have a significant leverage effect, enhancing RCEP’s vitality, she said.
“Together with the Belt and Road Initiative that has largely improved logistics links between China and Thailand, the implementation of RCEP will bring more diversified trade and transportation modes and significantly boost China-Thailand trade ties,” she said.
In 2022, the China Institute for Reform and Development initiated the RCEP Think Tank Network, with 18 think tanks from 13 countries being involved so far. It aims to gather suggestions from experts in the region for better implementation of the agreement.
“RCEP holds enormous potential for economic growth in Asia,” said Chi Fulin, president of the institute. “We will keep focusing on the policy practices and conduct assessments regularly,” he said.
He said the institute will continue to serve as an open platform to promote policy exchanges, coordination, and communication among member countries, and provide intellectual support for mutual policy learning and macroeconomic policy coordination.
Chi also said the institute plans to establish an RCEP Implementation Capacity Building Academy to provide institutionalized RCEP implementation capacity training.