Nations plan to eliminate tariffs on 65% of traded goods next year
China was among 16 nations issuing a joint declaration on a trade pact during the ASEAN meetings on Sunday, paving the way for the Regional Comprehensive Economic Partnership to take effect next year. [Special coverage]
Under the declaration, negotiations on the RCEP, which started three years ago, will conclude in 2016 and the 16 countries will accelerate the reduction of tariffs for trade in goods. Its members－the 10 ASEAN states, China, Australia, Japan, the Republic of Korea, New Zealand and India－account for almost half the world's population and have a combined GDP exceeding $17.1 trillion, or 27 percent of the global GDP.
The RCEP is thus larger than the recently concluded 12-nation Trans-Pacific Partnership, which includes the United States, Japan, New Zealand, Austrailia and Brunei, but not China.
At a meeting of ASEAN members, Japan and the ROK, Premier Li Keqiang said on Saturday that China is willing to work with the other countries to finalize RCEP negotiations next year and to establish a free trade zone covering the largest population of the world.
China believes that the TPP and RCEP can help each other and contribute to the joint goal of establishing an Asia-Pacific free trade zone, Li said. He added that China has an open attitude toward the TPP.
China will continue to hold the East Asia Business Forum, work toward advancing East Asian e-commerce and logistics cooperation, and make regional trade and investment more convenient, he said.
In the first step of RCEP trade liberalization, tariffs on 65 percent of trade will immediately be dropped when the pact takes effect. In the next phase, tariffs on another 20 percent of trade in goods will be gradually elinimated within 10 years. The remaining 15 percent will remain in place or be gradually reduced to from 5 to 10 percent.
Gao Yan, vice-minister of commerce, said at a media briefing last week that China has been "a firm supporter and promoter" of the RCEP and hopes the negotiations maintain their momentum so as to conclude as soon as possible.
RCEP negotiations have already gone through 10 rounds of talks and four rounds of ministerial-level meetings, Gao said, and an early finalization would significantly boost all parties' confidence.
Sunanta Kangvalkulkij, deputy director-general of Thailand's Trade Negotiations Department, said in a recent report in the Nation newspaper in Bangkok that the RCEP will help compensate ASEAN member states that do not join the U.S.-led TPP pact.
"The RCEP should be enforced before the TPP so that it will help ensure regional growth," Sunanta was quoted as saying.
Ding Yifan, an economist at the State Council's Development Research Center, said that the RCEP and TPP are competing pacts and have overlapping characters.
"China has been pushing to advance free trade in the whole Asia-Pacific region, but the U.S. selected only a group of countries in the region to establish the TPP," he said.